Brand name with 150 lakhs

[varun arora]

Dear Experts

If a manufacturer is working for others i.e doing job work but not labelling the brand on product.

Then is this clearances is not eligible to take benefit of ssi exemption means not using of brand name but working for others disqualifies to take benefit of 150 lakhs

[KASTURI SETHI]

The value of job work is not to be included in threshold exemption limit of ₹ 150 lakhs.

[CSSANJAY MALHOTRA]

I endorse the views of Sh. Kasturi ji Sir.......

[Mahir S]

Yes sir, Clearances which are exempt from the whole of the excise duty leviable thereon under specific job work notifications are not to be included for calculation of threshold limit of ₹ 150 lalkhs, as explained above.

[KASTURI SETHI]

Sh.Varun Arora Ji,

In continuation of my reply dated 8.3.16, I further clarify that value of job work will be taken into account (included) for computation of aggregate value of clearances of Rs.Four Hundred lakhs in terms of Board's circular no. Circular No. 733/49/2003-CX., dated 6-8-2003 read with Notification No.8/2003-CE as amended.

The benefit of value of job work is only for computation of clearances of ₹ 1.50 crores as an SSI Unit and NOT for Rs. Four Hundred Lakhs.

 

[CSSANJAY MALHOTRA]

Respected Sh. Kasturi Sethi ji,

For sake of better clarification, Clearances which are Exempted from whole of Duty of Excise under SPECIFIC JOB WORK notifications are not to be included for determing Turnover of ₹ 400 Lacs.

Specific Job Work Notifications such as 214/86-CE dt. 25/03/86 or 83/94-CE dt. 11.04.94

May be I would have missed out some provision... Would look forward for knowledge update.

SSI has option for duty payment for the job worker activity done for manufacturer. Same does not fall under 214/86, hence your view point to that extent holds good.

[KASTURI SETHI]

Sh.CS Sanjay Malhotra Ji,

Sir, I have rechecked the language of Notification No.8/2003-CE. You are absolutely right. The value of job work under specific notifications is not to included for computing Rs.four hundred lakhs as per clause 3 A(e) of this notification. The querist is requested to follow the correct reply of Sh.CS Sanjay Malhotra, expert.

[KASTURI SETHI]

Sh.CS Sanjay Malhotra Ji,

In your reply dated 10.3.16, the last line, "SSI has option for duty payment for the job worker activity done for manufacturer. Same does not fall under 214/86, hence your view point to that extent holds good." has made the concept of eligibility of SSI unit clearer not only to me but also to all other visitors. Really enriched the knowledge.Thanks, Sir.'That extent' was brewing in my mind.

[varun arora]

Dear Experts

Thank you so much for prompt reply, But i want to clarify again if i am working for others and not labelling any brand name then in this case shall i need to pay excise duty without any exemption i.e. value based exemption.

Shall it mean that This is job work and i can not avail ssi exemption of 150 lakhs

[Mahir S]

Varun ji,

Without confusing you any more, Let me tell you in simple words that you can carry out job work of as much amount as u you want, and still you can avail the SSI exemption benefit..

Cheers...

[varun arora]

Ok thank you sir.

[KASTURI SETHI]

Agreed with views dated 10.3.2016 of Sh.Mahir S, Sir.

[Mahir S]

Thanks all...

AI Summary

Job work valuation exclusion: job work not counted for SSI threshold, but turnover ceiling may include it absent specific exemptions.
The value of job work is not included when computing turnover for entitlement to the SSI value-based exemption, so job-working units can avail SSI exemption despite substantial job-work. However, job-work value is generally included in computation of a separate higher turnover ceiling unless the job-work clearance is fully exempt under a specific job-work exemption notification; electing to pay duty for job-work activity can affect which provisions apply.