Exemption of excise duty to SME upto 1.5cr

[Vivek Agrawal]

Hello

This is regarding exemption of excise duty to small manufacturing unit till 1.5cr. I am small manufacturer. I am exempted of excise duty till 1.5cr. My question is

1. if I sale some machine or other non manufacturing item, will that count in my turnover of 1.5cr.

2. If apart from manufacturing, I am also doing the job work in the same premises. Basically I manufactured the same item and sale it. And I also do the job work of same item for other big companies. So question here is is this job work income will get count in turnover limit of 1.5cr.

[Mahir S]

Vivek ji,

The point wise reply to your query in simple words is as under :-

(i) NO

(II) NO

[Vivek Agrawal]

Thank you for quick response. I have few more questions based on your reply.

1. right now my turnover is 1.4cr. do I need to inform excise office that i will be crossing 1.5cr and when.

2. lets when i cross 1.5cr I have stock of material of approx value 20 lacs. which includes excise duty of 2.25 lac excise duty (input). so at this time will i get this 2.25cr as input excise duty and what will be the procedure for the same.

[Mahir S]

The point wise reply to your query in simple words is as under :-

(i) YES , immediately.

(ii) YES.

[Vivek Agrawal]

what will be procedure to get the input of once we cross the 1.5cr.

[Mahir S]

An SSI Unit is a unit whose turnover in the preceding financial year is less than ₹ 400 Lakhs. Such units have the option to avail full exemption from payment of duty upto turnover of ₹ 150 Lakhs in the current financial year.

In respect of such an unit, if the aggregate of home clearances (i.e.excluding export turnover) is less than ₹ 150 Lakhs, then the unit need not get itself registered. For calculating the aggregate of home clearances, the total of clearances from all factories of the manufacturer and from any factory by one or more manufacturers must be taken into account.

However, once the turnover crosses the ‘specified limit’ , i.e. ₹ 90 Lakhs, such units have to file the declaration to the Assistant Commissioner/Deputy Commissioner. CBEC Manual provides that genuine delays in filing the declaration should not be viewed seriously and the assessee shall still be allowed to enjoy the benefit of not requiring registration upto the turnover of ₹ 150 Lakhs.

After the turnover of ₹ 150 Lakhs, the SSI unit shall be liable to get registered and start discharging duty liability. At that point of time, CENVAT Credit of raw materials lying in stock must be ascertained and the SSI unit shall be eligible for the benefit of set-off of CENVAT Credit against duty payable.

Credit is also allowed on the inputs lying in stock, contained in work in process and contained in finished goods lying in stock as on the date of crossing Rs one and half crore turn over.

Regarding the procedure, you have to prepare a list of all such physical inputs lying in stock and the cenvat credit available thereon and submit a detailed letter to the excise department at time of online application for excise registration. Simultaneously, you can also avail cenvat credit in your cenvat account register and you can then show it in your excise return and also utilize it for payment of excise duty.

[KASTURI SETHI]

Sh.Mahir S.

Sir, It is topmost reply. I fully agree with your views.

AI Summary

SSI exemption threshold: non-manufacturing sales and job-work receipts excluded from exempt turnover; credit permitted on inputs. Small manufacturing units may claim a turnover-based excise exemption; sales of non-manufacturing items and job-work receipts do not count towards the exempt turnover. If aggregate home clearances remain below the ceiling registration is not required, but filing a declaration is required on crossing the lower trigger. Once the exemption ceiling is exceeded the unit must register, discharge duty and is eligible to set off CENVAT Credit on inputs, work-in-process and finished goods in stock by preparing an inventory, submitting it with online registration and recording and using the credit in returns.