Excise duty applicablility

[Asked by Guest]

Dear Learned Members,

This is with respect to the captioned subject.

In this regard, please note we have recently incorporated an LLP which is in the business of manufacturing control panel which is used in various machinery and we are yet to start to any business/manufacturing.

Hence, I want to know when should I need to get register for excise duty. Are there any threshold limit for it.

Further my vendor is asking for excise duty registration no or exemption certificate from excise duty payable.

Hence, I request you all to please kindly help to solve my problem.

[Mahir S]

Sir,

The point wise reply to your query are as under :-

1. You are not required to get excise registration for first clearances up to an aggregate value not exceeding one hundred and fifty lacs rupees made on or after the 1st day of April in any financial year.
2. However, simultaneously, you have an option not to avail the above referred exemption and instead pay the normal rate of duty on the goods cleared by you. Such option may be utilized if you want to get registered and to provide your excise registration number to you vendor. Herein, you shall be eligible to avail cenvat credit on input, input services and capital goods and such credit can be utilized for payment of excise duty.
3. Further, if you opt for point (i) above, then you can request the Jurisdictional Range Superintendent who can issue a certificate stating that you are not registered with excise and hence exempted from payment of excise duty. You can thereafter forward the said certificate to your Vendor.

Hope all your points are cleared through above clarifications.

[KASTURI SETHI]

SH.SHINIL NAMBRATH JI,

I fully endorse the views of Sh.Mahir S. Sir. I would like to add as under:-

1. If you intend to avail SSI exemption limit of ₹ 1.50 crores, you are required to apply for CE Registration Certificate immediately on crossing specified limit of ₹ 90 lakhs (increased from ₹ 40 lakhs consequent upon enhancement of threshold exemption limit to ₹ 1.50 Crore w.e.f. 1.4.2007) .This is as per Chapter-2 Point No.4 of CBEC's Excise Manual of Supplementary Instructions, 2005 as amended. Prior to reaching the clearance of value of ₹ 90 lakhs, you are required to file Declaration Form in ANNEXURE-4 with the A.C./D.C. of Division as per Notification No.36/2001-CE(NT) dated 26.6.2001 as amended vide Notification No.14/2005-CE(NT) dated 1.3.2005 & 40/2008-CE(NT) dated 29.9.2008.

[YAGAY and SUN]

Dear Shinil

For availing SSI unit, one should be registered as SSI unit. There is specific investment limit in case of SSI Unit. Large scale Units cannot claim SSI exemption in guise of SSI Units.Further, if SSI Unit exemption is availed then No CENVAT credit would be available on inputs, input services and Capital goods.

Regards

YAGAY and SUN

Management, Business and Indirect Tax Consultants

[Ganeshan Kalyani]

Yes the benefit of threshold limit should be taken into consideration rather than applying for excise registration at the very beginning. Thanks

[Mahir S]

Thanks Kasturi ji for endorsement of my views.

[KASTURI SETHI]

I agree with the views of M/s.YAGAY AND SUN, Sirs, in their reply dated 16.2.2016.

Dear learned members,

I'm extremely thankful to each one of you for your replies.

My query has been solved.

Tons of thanks.

[Mahir S]

AI Summary

Excise registration threshold: units may defer registration until specified clearance limit yet can opt to register to claim cenvat credit.
Manufacturers may defer excise registration while aggregate clearances remain within the SSI exemption threshold; they may instead elect voluntary registration to avail cenvat credit and pay duty at the normal rate. Retaining the exemption disqualifies cenvat credit. A prescribed declaration must be filed with divisional officers before reaching an interim clearance milestone, registration is required upon crossing the specified clearance trigger, or a Range Superintendent may issue a certificate confirming non-registration and exemption for vendors.