The meaning of Small Scale Industries is the industry whose aggregate turnover does not exceed 25lakh to 2 crores. There are certain goods exempted from the Small Scale Industries (SSIs). This benefit of exemption is not applicable to all the goods and only to certain goods listed in the notification. The notification covers most of the products. However, tobacco products, pan masala, watches, matches, aluminum patties/Patta, steel patties/pattas and some textile products are specifically excluded from Small Scale Industries (SSI) exemption. Determining the value of clearances for consumption of Rs. One fifty Lakh.
Following clearances will be excluded-
a) Clearances exempt from the excise duty
Clearances which are free from paying the excise duty under any notification or due to some other reason.
b) Clearances bearing the brand name or trade name of another person
Clearances using the brand name of another person, not eligible for the grant of this freedom.
c) Clearances of intermediate goods/ goods captively consumed in case the final products are eligible for SSI exemption
Clearances of the specified goods which are used as inputs for the further manufacturers of any specified goods within the factory of production of the specified goods. Here specified goods are those goods, which are eligible for SSI exemption.
d) Export clearances
Clearances meant for export
Determining the aggregate value of clearances for home consumption of Rs.400 Lakh.
For the purpose of determining the aggregate value of clearances of all excisable goods for home consumption, i.e. Rs.400 Lakh, the following clearances shall not be taken into account:
a) Clearances to FTZ/SEZ/100% EOU/EHTP/STP/UNO/International organization.
Clearances of excisable goods without payment of duty-
i. to a unit in a free trade zone (FTZ); or
i. to a unit in a special economic zone (SEZ); or
iii. to a hundred percent export-oriented undertaking (100% EOU); or
iv. to a unit in an Electronic Hardware Technology Park or Software Technology Park (EHTP/STP); or
v. supplied to the United Nations Organization (UNO) or an international Organization for their official use or supplied to projects funded by them, on which exemption of duty is available under Notification No. 108/95-C.E., dated 28.08.1995.
b) Clearances bearing the brand name or trade name of another person.
Clearances bearing the brand name or trade name of another person, which are ineligible for the grant of this exemption.
c) Clearances of intermediate goods/ goods captively consumed in case the final product is eligible for SSI exemption.
Clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods. Here, specified goods are those goods, which are eligible for SSI exemption.
d) Clearances exempt under specific job work notifications.
Clearances which are exempt from the whole of the excise duty leviable thereon under specific jib work notifications, viz. Notification No. 214/86- C.E., dated 25.03.1986 or No. 83/94- C.E., dated 11.04.1994.
e) Export clearances.
Clearances meant for exports.
Points which merit consideration
1. Export to Nepal and Bhutan is not considered as exports. It is taken as clearance for home consumption. Thus, export turnover of Nepal and Bhutan shall be included in determining the limit of Rs. 150 Lakh as well as Rs. 400 Lakh.
2. For computing, the turnover of Rs. 150 Lakh, the clearances of goods exempted under any other notification is to be excluded. It is important to note here that while computing the limit of Rs. 400 Lakh, turnover of goods exempted under any other notification ( except clearances to FTZ, SEZ, 100% EOU, EHTP/STP, UN, etc. and specific job work notifications) has to be included.
Declaration to be filed on reaching specified limit
a) the units with turnover more than the given limit (90 lakh) but less than the exemption limit have to pass a legal declaration of the same.
b) This declaration can be filed once in a lifetime only.