Small Scale Industry Exemption Under Central Excise

Under the regulations of the Central Excise Act, a Small Scale Industry is one whose aggregate value of Turnover does not go beyond Rs.150 Lakhs made on or after the 1st day of April in any financial year. During 1st March 2003, the government had given an exemption notification for the small scale industry (SSI) under the central excise law. It intends to provide few relaxations towards small scale industries. As per this notification, an incentive is offered to SSI for the development of the economy, even though exemptions to small scale industries cannot be applied to every one of the products and the benefits are restricted. Eligibility for SSI exemption For a business towards availing the exemptions, it must be registered with the State Directorate of industry and it should produce the certificate at the time of obtaining the exemptions. If the turnover of the prior year is to 400 lakhs, and it manufactures the goods specified in the notification issued then it is qualified for the exemption. Rate of duty The Indian Government gives an exemption from duty if the turnover is Rs. 150 lakhs in the financial year. It implies the excise duty shall be payable if the turnover is above 150 lakhs, likewise if the SSI entity had started up the commerce in a current fiscal year, then it is allowed to the benefit of the exemption for the present year as its previous financial year clearances are NIL, even with the fact that the business has not started the operations.