SSI limit applicable

[Surya Moorthy]

If a firm has levy duty from March 2011' for their goods @1% of eligible turnover(after adjusting SSI limit) but its total turnover at the end of the FY 2010-11 would be less than Rs.4 Crores then whether it is necessary to levy duty from 1st april 2011' or after acheiving the SSI Limit of 1.5 crores for FY 2011-12? 

[CASeetharaman KC]

If the taxable turnover of the firm for the preseding financial year exceeds 4 crores limit  then the SSI exemption of 1.5 crores would not be available to the firm for the current financial year and the firm needs to pay excise duty on all the taxable turnover during the current financial year. In ths instant case you have mentioned that the total taxable turnover for FY 2010-11 does not exceed 4 crores hence the SSI exemption limit of 1.5 crores would be available for the firm for FY 2011-12. The firm needs to pay excise duty only on the turnover in excess of 1.5 crores for the current financial year.

[Surya Moorthy]

Thank you for reply Sir.

AI Summary

SSI exemption threshold depends on prior year turnover; if prior turnover exceeds the prescribed limit, duty applies on excess. Where a firm's taxable turnover in the preceding financial year exceeds the statutory upper limit, the SSI exemption is unavailable and duty must be paid on all taxable turnover in the current year. If the preceding-year taxable turnover does not exceed that upper limit, the SSI exemption applies for the current year and duty is payable only on current-year taxable turnover exceeding the SSI exemption threshold.