Rural area SSI exemption under 8/2003

[sv bhasker]

Dear experts

An assesee sends raw material and  packing material to a manufcaturer in rural area and gets a product with  'X' brand  manufactured .  He pays the rural area manufacturer,  per  unit basis.In addition, he also manufactures 'X' brand product  in his factory. 

(a)For computing exemption turnover under Notfn 8/2003-CE, is it necessary to add turn over of rural area manufacturer to assessee's own turn over in a year.OR

(b) In the given circumstances, is the exemption under Notfn 8/2003-CE, is available separately  each to the assessee and rural area manufcaturer. 

[Mahir S]

(a) Yes, for computing the exemption turnover under  notification, no. 8/2003 CE dated 01.03.2003, the turnover of rural area manufacturer is required to be added to assesee's own turnover in a financial year.

(b) herein the exemption from computing turnover under  notification, no. 8/2003 CE dated 01.03.2003, shall not be available to the assessee who is placng order with the rural area manuacturer. Hence this benefit is not available to U.

But, yes, the exemption for manufacture of specified goods bearing a brand name or trade name in a rural area shall be available to the rural area manufacturer. In other words, in the case of rural area manufacturer, the goods manufactured through brand name or trade name are not required to be taken into account by him for calculating his exempton limit under  notification, no. 8/2003 CE.

 

[sv bhasker]

Thanks for the response Mr Naveed.

Your answer for (a) is clear  to state  that the  assessee who sends raw material to a manufcaturer in rural area for getting"X" brand goods manufcatured, is a real manufacture as defined in sec 2(f) of Central Excise Act,1944 for the purpose of availing SSI benefits. 

[Mahir S]

Yes, absolutely correct..Now you have understood the point perfectly..

Thanks a lot for the Thanks...........

AI Summary

Rural Manufacturer's Turnover Must Be Added to Assessee's for Exemption Under Notification 8/2003-CE; Independent Exemption Allowed An assessee sends raw and packing materials to a rural manufacturer for producing a product under the 'X' brand and also manufactures the same product in their factory. The discussion addresses whether the turnover of the rural manufacturer should be included in the assessee's turnover for exemption under Notification 8/2003-CE. It is clarified that the rural manufacturer's turnover must be added to the assessee's turnover for exemption purposes. However, the rural manufacturer can independently avail the exemption for goods produced under a brand name in a rural area, without including these goods in their exemption limit calculation.