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General Exemption Scheme of Central Excise for SSI Units

Excise concessions are one of the major support for SSI sector which faces competition from large industries. In the Union Budget for 1997-98 and 1998-99 some major changes were made in the Small Scale General Excise Exemption Scheme.At present, the SSI sector enjoys excise benefits as given below.

Units not opting for MODVAT credit facility

The SSI units which do not want to avail MODVAT credit facility are entitled to Excise exemption and concessions on goods manufactured by them and falling in the Annexure to Not. No. 8/99-CE dated 28th Feb, 1999 as follows:-

Amount of clearance	Rate of duty applicable
First clearance upto an aggregate value not exceeding Rs 50 lakhs in a financial year	Nil duty
Next clearance upto an aggregate value not exceeding Rs 50 lakhs in a financial year	5% ad valorem duty
All clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods.	Nil

Units opting for MODVAT Credit Facility

The SSI units which want to avail MODVAT Credit facility are entitled to Excise concessions on goods manufactured by them and falling in the Annexure to Not. No. 9/99-CE dated 28th Feb, 1998 as follows:

Amount of clearance	Rate of duty applicable
First clearance upto an aggregate value not exceeding Rs 50 lakhs in a financial year	60% of normal duty will be applicable
Next clearance upto an aggregate value not exceeding Rs 50 lakhs in a financial year	80% of normal duty will be applicable
All clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods.	Nil

However it may be noted that there are some items on which excise Exemption/Concession is not available whether the units opt for MODVAT credit facility or not.