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CENTRAL EXCISE

  Excise exemption to small scale units is mainly/chiefly granted under notification no.
8/99 - CE dated 28.2.99 as amended from time to time.

Key Feature of the Central Excise tariffs

- Extension of Modvat to capital goods and petroleum products
- Shift in the bulk of excise taxation from specific to ad valorem rates which will assure much greater built-in buoyancy of revenues.
- Application of Uniform rates for similar commodities to the extent possible. This will reduce classification problems, scope for misuse and widespread litigation.

EXCISE DUTY & SMALL SCALE INDUSTRIES
Full exemption continues for many goods such as
- Unbranded drugs
- Domestic electric bulbs
- Bicycles
- Spices
- Jams
- Jellies
- Sauces
- Packaged Tea
- Coffee
- Ketchup
- Butter
- Cheese
- Skimmed milk powder
- Vegetable oils
- Pickles
- Canned fruits and dried vegetables
- Certain soya products
- Starches and
- Preparations of meat and fish.

Other Major Features of Excise Tax Policy for SSI Sector

- In the last budget the MODVAT adjustment allowed to manufacturing limits had been capped at 95%. In the Union budget 1999-2000 MODVAT credit has been restored to 100%.

- The structure has been rationalised. 11 major adv. Rates have been merged into following three new rates.

(1) Merit rate : 8% (merging existing rates of 5%, 8%, 10% 12%).
(2) Central rate : 16% (merging existing rates of 13%, 15%, 18%).
(3) Demerit rate : 24% (merging existing rates of 25%, 30%, 32%, 40%).

As a measure for simplification of procedures and also to improve the liquidity position of manufacturing units in the SSI Sector, the SSI units have been permitted to pay excise duty on a monthly basis.

Presently, small scale units are allowed complete exemption from excise duty in respect of clearance of specified goods upto a value of Rs.30 lakhs of the Central Excise Tariff.

Clearances of goods between Rs.50 lakhs and 100 lakhs attract central excise duty at the rate of 5% adv. on clearances of goods between Rs.100 lakhs and above this attracts normal duty.

The existing distinction between one chapter clearances and more than one chapter clearances has been removed.

Tiny and small-sector units having sales turnover of less than Rs.50 lakh will not be required to pay any excise duty.  Also, no officer would visit any small-scale factory without the written authorisation of the assistance 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.