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!

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.