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Ssi exemption

SATVEER (executive) (137 Points)

09 May 2015

Dear all,

please discuss about the limit of ssi exemption, what is the limit of obtaning ssi exemption

thanks & best regards

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vijay krishna (Student) (42 Points)
Replied 09 May 2015

1. The basis for ascertaining whether a unit is SSI or not is the value of clearances of the unit in the previous financial year. 2. If the value of clearances of the unit in the previous financial year DOES NOT EXCEED 4 CRORES, then the unit is eligible for SSI exemption. 3. Units eligible for SSI exemption are exempted from payment of excise duty on turnover up to 1.5 CRORES in the current financial year. 4. EXCEPTION: If the goods bear a brand name of another person, SSI exemption is not available. 5. But there are certain goods which bear a brand name but are eligible for SSI exemption, they are - a. Goods manufactured in rural areas b. Packing material c. Account books d. Registers e. Writing pads. Example : (Q) ABC Ltd's value of clearances in the year 2013-14 is 2.5 crores. The value of clearances of ABC Ltd in 2014-15 is 5 crores. Is it eligible for SSI exemption? If yes, then to what extent? (A) Yes, ABC Ltd is eligible for SSI exemption since the value of clearances of the unit in the previous financial year is less than 4 crores (2.5 crores). ABC Ltd need not pay excise duty on turnover up to 1.5 crores. So, out of 5 crores it is liable to pay excise duty only on 3.5 crores (5-1.5). Refer to ICAI practice manual for illustrations. Its the best material for practice.