benefit of SSI to manufacturer selling only under brand name of others.

[Himanshu Gupta]

Dear Experts,

One of my client manufactures garments and dispatches them under brand name of other. as per SSI conditions, clearance under brand name of other shall not be considered for the threshold limit of 400 lacs/150 lacs. manufacturer has no other clearances. so now is he eligible for ssi exemption and all its benefits irrespective of his turnover(which includes only branded clearances)?

[Rajagopalan Ranganathan]

Sir,

Para 4 of Notification No.08/2003-CE as amended states that "the exemption contained in this notification shall not apply to specified goods bearing a brand name or trade name, whether registered or not, of another person, except in the following cases."

Para 4 C of the same Notification states that "Notwithstanding anything contained in the preceding paragraphs, the exemption in respect of goods bearing a brand name or sold under a brand name and having a retail price (RSP) of ₹ 1000 and above, falling under Chapters 61, 62, 63 (except laminated jute bags falling under 6305, 6309 00 00, 6310), shall be restricted to rupees twelve lakh fifty thousand for the remaining part of the financial year 2015-16."

Therefore in my opinion in respect of excisable goods falling under Chapters 61,62, 63 (except laminated jute bags falling under 6305, 6309 00 00, 6310), though the excisable goods bearing the brand name or sold under a brand name are eligible for SSI exemption granted by Notification No. 8/2003-CE as amended.

[KASTURI SETHI]

Sh.Himanshu Gupta Ji,

Your client will not forfeit the status of SSI exemption because of clearance of manufactured products(excisable) bearing the brand name of another person in the situation explained by you.His status as SSI unit for clearance of goods other than brand name of another person remains intact ( i.e. unaffected) irrespective of the turnover of the branded goods. I also concur with the views of Sh.Rajagopalan Ranganathan, Sir.

Other criteria of value of investment of plant and machinery to remain within slab of SSI unit as per Industries department is not linked with the above reply.

[Himanshu Gupta]

Thanx a lot Rajagopalan & Kasturi Sethi Sir.

AI Summary

SSI exemption for goods sold under another's brand preserved with limited exemption and separate investment test applies. The exemption framework excludes goods bearing another's brand from SSI relief except where specified exceptions apply; for certain excisable garments with higher retail prices the notification limits the exemption available for branded clearances for the remainder of the financial year. A manufacturer clearing goods under another's brand does not automatically forfeit SSI status for other clearances, and the separate plant and machinery investment criterion remains unaffected.