excise on garments

[Satbir singh wahi]

Sir

Excise on garment unit

Financial Year 2014-15 Domestic sale Rs. 190 Lacs other than export of 1600 Lacs- Total ₹ 1790 Lacs

Financial Year 2015-16 Domestic sale Rs. 280 Lacsother than export of 1200 Lacs- Total Rs. 1480 Lacs upto 29.02.16

Whether covered by excise ?

[Rajagopalan Ranganathan]

Sir,

Only the following items falling under Chapter 57, 61, 62 and 63 are covered by SSI Notification: -

1. Chapter 57: -Carpets and textile floor coverings.

2. Chapter 61: - Articles of apparel and clothing accessories, knitted or crocheted.

3. Chapter 62: - Articles of apparel and clothing accessories, not knitted or crocheted.

4. Chapter 63: -Other made-up textile articles; sets; worn clothing and worn textile articles; rags.

You first ascertain under which of the above mentioned chapters the goods manufactured by you would fall and then take a decision.

[Satbir singh wahi]

Sir

Covered by Chapter 61 and 62

[Rajagopalan Ranganathan]

Sir,

Under SSI Notification No. 08/2003-CE dated 01.03.2003 excisable goods cleared for home consumption up to the value of ₹ 150 lakhs is chargeable to 'Nil' rate of duty. Beyond ₹ 150 lakhs and up to ₹ 400 lakhs duty at normal rate is chargeable. If total clearance for home consumption exceed Ra. 400 lakhs in the previous financial year, the normal duty is payable from the beginning of the next financial year. For calculating the limits of ₹ 150 lakhs and ₹ 400 lakhs value export clearance need not be taken into account. If export is made to Bhutan it is to be included in the value of goods cleared for home consumption.

[Satbir singh wahi]

Thks Sir

But financial year 2014-15 Domestic sale 190 Lacs i.e. below 400 Lacs

​In financial Year 2015-16 Domestic sale upto 29.02.2016 is Rs, 280 Lacs i.e. exceeding 150 Lacs

So need to take registration from 01.03.2016 and pay duty on Goods having RSP above 1000

[Rajagopalan Ranganathan]

Sir,

For the Financial year 2014-15 you have to pay duty on ₹ 40 lakhs which is in excess of ₹ 150 lakhs at the rate of 12.5%.

Roe the year 2015-16 you have pay duty @ 12.5% on 130 lakhs which is in excess of ₹ 150 lakhs. Export turnover need not be taken into account for calculating exemption limit of ₹ 150 lakhs or SSI exemption limit of ₹ 400 lakhs. But the export should be to all countries except Bhutan with effect from 1.3.2016

[Varun Arora]

Sir in your case i assume you are talking about branded readymade garments as you are mentioning rsp word i.e. 1000 in this case if your turnover of f.y 2014 -15 is upto 400 lakhs in your case its not crossing 400 lakhs then you are eligible to take benefit of 08/2003 but in the month of march 2016 ssi exemption is restricted to 12.50 lakhs subject to condition that the turnover during financial year 2014-15 has not exceeded 4 crores please see notification 8/2003 as amended by 8/2016 dated 1st march 16

[Satbir singh wahi]

thks Varun Ji

AI Summary

SSI exemption thresholds trigger excise registration and normal duty liability on domestic garment sales when exceeded, altering export inclusion rules.
For garments classified under apparel chapters, SSI Notification No. 08/2003-CE provides a nil-rate exemption for domestic clearances up to prescribed value thresholds, a higher threshold band where normal duty applies on the excess, and a tipping point that, if exceeded in a previous year, makes normal duty payable from the start of the next year. Export turnover (other than sales to Bhutan) is excluded when calculating these domestic thresholds. Exceeding the thresholds obliges excise registration and payment of normal duty on the excess value.