Financial Daily from THE HINDU group of publications
Thursday, Aug 29, 2002
Industry & Economy
Excise and Customs
Excise relief for some SSI items to be restored
NEW DELHI, Aug. 28
THE Minister for Finance and Company Affairs, Mr Jaswant Singh, has announced excise relief for a few items in the SSI sector, including ball and roller industries and the handloom sector.
The excise exemption on0 ball and roller industries will be restored to Rs 1 crore. Currently, the excise exemption on this product is available to units with a turnover of up to Rs 25 lakh.
At the third SSI convention held here, Mr Singh said that the pre-Budget excise exemption limit would also be restored immediately for the hand-processing sector. The relaxation in payment of duties by the bicycle industry would also be made effective immediately. The Finance Ministry will also consider the demand for sales tax relief on electronic toys after the value added tax becomes operational in all States.
"We will take an encouraging and sympathetic view on the problems of SSI," Mr Singh said. He added that the Task Force on Direct and Indirect Taxes, to be constituted in a day or two, would also look into the problems of the SSI sector.
The Finance Minister held that the introduction of the value added tax (VAT) system from April 1, 2003, would further benefit the SSI sector.
Stating that there cannot be a Limited Partnership Act for the SSI sector alone, Mr Sinha said that a working group in the Department of Company Affairs (DCA) was examining the issue.
The Minister of State for SSI and ARI, Ms Vasundhara Raje, felt that the sector was being "unfairly blamed and targeted" on excise issues.
"There are 95,000 excise assessees in India, of which about 4,000 account for 95 per cent of the total excise collections. What this implies is that the tinkering which is done each year with the SSI exemption scheme actually results in a marginal increase in revenue for the Government, but creates much greater hurdles for the industry to encounter," Ms Raje said.
"The sick units in the sector actually declined from over 3,00,000 units to just under 2,50,000 units within the last year in contrast to the non-SSI sector where the number of sick units actually increased during the period under review," the Minister said.
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