Availing SSI exemption

[Surya Moorthy]

Sir/Madam,

   Hi, I am Surya.I need clear explanation for this issue.

A firm has done sales Rs.2.1crores upto Feb 2011' for FY 2010-11. At the same time it is eligible to avail SSI exemption as fully exempted goods(FY 2009-10 turnover is Rs.4crores). From march 2011'  their goods attracts duty. Now, whether if it will done sales upto Rs.12 lacs for march 2011' the firm is liable to pay duty @1% for March 2011' or rest of balance of eligible Turnover or no liable to pay duty for FY 2010-11

                                   Thank you!

[CASeetharaman KC]

Your question is not very clear. As per my understanding it seems that you want to say that the firm sells taxable as well as exempted goods and from March 2011 the exempted goods have now come into the taxable category @ 1%. If this is so then the limit would have to be calculated after taking into account the turnover of taxable goods upto February and the total turnover for March. If the same exceeds the exemption limit then duty would be payable for the balance amount of turnover in excess of the exemption limit. Also you would have to take the stock of inputs as on the date when the turnover crosses the SSI exemption limit and declare to the department so that CENVAT can be availed on the stock.

[Santosh Kumar]

aggregate value of clearances of all excisable goods in preceding financial year should be less than Rs. 4 crore then exemption will be available.  Now, for the month of March 2011, the year 2009-10 is to be seen. If the aggregate value of clearances is less than Rs. 4 crore in year 2009-10 then exemption of 1.5 crore is available. For computing these 1.5 crore, only dutiable goods is to be seen. This limit of Rs. 1.5 crore will be available for March 2011 as the goods cleared prior to March 2011 were exempted and will not be considered in calculating the same. Thus, the exemption is available in March 2011 also.
Rs. 2.1 crore(sales upto feb) + Rs. 0.12(sales for the month of march) crore =Rs. 2.22 crore - Rs. 1.5 crore =Rs. 0.72 crore (taxable)

[Surya Moorthy]

Thank you for your reply Sir

     

[NANDKUMAR SAGWEKAR]

Dear Mr. Surya Murthy

Please read carefully the noti No.8/2003 dt 01.03.2003 carefully which is related to SSI exemption and there after decide the things your all answers are there .

 

Thanks

 

A M SHEMBEKAR

 

AI Summary

SSI exemption threshold determines when previously exempt goods attract duty; excess turnover beyond the exemption becomes taxable. SSI exemption is determined by aggregate clearances in the preceding financial year; when exempt goods become dutiable, exemption for the month of change is assessed by reference to the earlier year and by dutiable goods turnover, excluding prior exempt clearances. If combined turnover exceeds the exemption limit, duty is payable on the excess, and the assessee must declare input stock as on the date the exemption limit is crossed to claim CENVAT on that stock.