eexemption

[DEEPAK SHARMA]

One of the shop, doing business of ₹ 10 crore in a financial year of sweet. Simultaneously, they manufactured pastry and cake of ₹ 50 lakhs. Is they require to pay duty on pastry and cakes? Even the Sale of pastry and cakes is below 1.5 Crore. Please guide us with the parameters of 1.5 crore and also 4 crore

[YAGAY and SUN]

Dear Deepak,

We are afraid that the number you mentioned in the first line of your query, is not equal to number you mentioned in the third line of your query. Please make corrections to enable us to revert on your query.

Regards,

YAGAY and SUN

(Management and Indirect Tax Consultants)

[DEEPAK SHARMA]

Dear Mr. Pradeep Khatri,

I mean to say that, my client is enganged in the manufacturing of various sweets. and the turnover of sweet is up to 10 crore. they also manufactured pastry and cakes of ₹ 50 lakhs.

I mean to say that wether my client is entitled to avail exemptio of ₹ 1.5 crore in the manufacturing of pastry and cakes or not?

Note: The concern excie department is insisting us that the firm is not entitle to avail 1.5 crore exemption on pastry and cakes, as the firm has cross the SSI limit of 4 crore in previous year. resulting firm has done cladastine removal of pastry and cakes.

My point is only that if the firm is manufacturing fully exempted goods and having turnover of ₹ 10 crore in previous year. in current year they started manufacturing of pastry and cakes and have turnover of pastry and cakes is ₹ 50 lakhs. is they require to pay excise duty on the very first Rupees of Pastry and cakes, or entitle to avail exemption limit of 1.5 crore on pastry and cakes.

[YAGAY and SUN]

Dear Deepak,

Turnover of non excisable goods should be excluded:- In this matter, some goods were non excisable, i.e. these were non included in Tariff at all. In such case, its turnover cannot be considered for purpose of exemption limit - Munch Food Products v CCE -2002 (143) ELT 656 (CEGAT).= 2002 (143) ELT 656

In our opinion, this is correct legal position that if goods are not excisable at all, then, there is no requirement to add/club its turnover in the other goods which SSI unit is manufacturing. Same provision for calculating limit of ₹ 1.50 crore.

For availing SSI exemption you must be registered as SSI unit as per the eligibility mentioned in the SSI provisions.

Regards,

YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

SSI exemption: non-excisable turnover excluded; registration and excisable turnover determine eligibility for exemption on newly manufactured goods.
Turnover of goods not excisable at all must be excluded when computing SSI exemption thresholds; eligibility to claim the exemption for newly manufactured excisable items depends on excisable turnover alone and on being registered as an SSI unit.