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Excise duty concessions have been given to the small scale industries in what is called the General Excise Duty Exemption Scheme for small Industries. This is to enable the small scale industries to compete on favourable terms with their counterparts in the large and medium sector. Excise exemption to small scale units is mainly/chiefly granted under notification no. 175/86-CE dated 1.3.1986 as amended from time to time.

As of now, the Excise Duty Exemption Scheme applies to the entire small scale industries spectrum, barring a few specified items. The relief is as follows:-

Clearance Slab

(Rs. in lakhs) - Rate of duty

0-50 - NIL

50-100 - 5%

100-300 - Normal rate of duty

The scheme is applicable to small scale industries with annual turnover limit of up to Rs. 300 lakhs. As per 1994-95 budget unregistered units have been equated with registered units with regard to excise exemption/concessions.

The existing distinction between one chapter clearances and more than one chapter clearances has been removed. The higher notional credit of 5% has been withdrawn.

Also, no officer would visit any small-scale factory without the written authorisation of the Assistant Collector indicating specifically the purpose of visit.

No registration with the Directorate of Industry or DCSSI would be necessary for availing of the exemption under SSI scheme.

No declaration would be required to be filed with the Central Excise as long as the sales of goods (excluding completely exempted goods) are within Rs.50 Lakhs.

SSI Units have been permitted to pay excise duty on monthly basis with effect from 01.06.99.

SSI exemption extended to goods bearing a brand name of another manufacturer, when produced by SSI Units located in the rural areas. The details of the scheme are being finalised by the Ministry of Finance.