ANOTHER FACTORY STATRTING IN SAME NAME

[ANBALAGAN ANBU]

Dear Experts, We have running one manufacturing unit.We have plan to start another factory in other places in same name with same partenrs. First factory production is Valves New factory production is castings.We have procure castings for our valves factorywhat is procudures

[PAWAN KUMAR]

Dear Sir,

As per my view, you need to get the excise registration.

[Rajagopalan Ranganathan]

Sir,

If the turnover of your present factory is below ₹ 400 lakhs and the turnover of your proposed factory is not likely to exceed ₹ 400 lakhs during the current financial year them you are eligible for SSI exemption. But as per para 2 (vii) of Notification No. 8/2003-CE dated 1.3.2003 as amended the aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories, or from a factory by one or more manufacturers, does not exceed rupees four hundred lakhs in the preceding financial year.

Therefore if the turnover of both of your units exceeds the limit of turnover of ₹ 400 lakhs then you cannot avail the SSI exemption and you have to pay duty at normal rate of 12.36%. As observed by Mr. Pawan Kumar you have take a separate registration and maintain separate set of accounts in respect of your new factory.

[Rajagopalan Ranganathan]

Sir,

I missed to mention the following point. Since you have two factories, for calculating the exemption limit of ₹ 150 lakhs and overall limit of ₹ 400 lakhs the turnover of both the factories will be clubbed. That is, if the total turnover of both the factories exceed ₹ 400 lakhs then you will not be eligible for SSI exemption under Notification No. 8/2003-CE dated 13.2003 as amended.

[YAGAY and SUN]

Dear Anbalagan Anbu,

SSI Limit only can be availed if a factory/unit is registered under the provisions of SSI and adhered the investment criterion in this regard.

You would have to get the PAN based registration certificate from the C.E. Office. VAT/CST/Entry Tax/Professional tax registration certificates from the State's VAT Department. Factory license, Pollution Consents, ESI, PF etc also required.

For getting the goods from other factory, please take of valuation rules for payment of Central Excise Duty on appropriate assessable value.

Regards,

Sameer Malhotra - Consultant

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[Mahir S]

Yes sir, all procedures as required for setting up of new factory is to be carried out.

However, fact that both the factories are associated to each other has to be intimated to the department.

AI Summary

SSI exemption eligibility limited by aggregate turnover across related factories; obtain separate excise registration and comply.
Separate excise registration and distinct accounts are required for the new factory; SSI exemption eligibility is determined by aggregating turnover/clearances of all related factories so combined turnover exceeding statutory limits disqualifies units from SSI benefits, and valuation rules apply to inter-unit transfers while prescribed state and labour registrations and licences must be obtained and disclosed to the department.