Kelkar for excise sops to SSIs with Rs 50 lakh

NEW DELHI: In what could be a major setback to small scale industries, the Kelkar Task Force on Friday mooted that SSIs with a turnover of Rs 50 lakhs should be eligible for excise duty exemption while gradually phasing out the tax sops for larger SSIs in two years.
"The duty exemptions should be extended to only small units with a turnover of Rs 50 lakhs. The duty exemption limit for larger SSI units should be gradually brought down to Rs 50 lakhs," the report, submitted to Finance Minister Jaswant Singh, said.
The time frame suggested for the lowering of the turnover ceiling for larger SSIs has been two years -- from Rs one crore to Rs 75 lakh in the first year and subsequently to Rs 50 lakh in the second year, it said.
"However, on reduction of exemption limit, the units would have the option of payment of duty at 4.0 per cent without Cenvat on the value of clearance upto Rs one crore," it said.
The other option of paying duty at the normal rate would continue to be avaialble.
SSI should file a declaration by April 2003 when the value of clearance touches Rs 50 lakh, it said.
The excise exemptions should be offered to SSIs manufacturing matches.