Budget 1997-98: Full Text
Small Scale Sector
- The small scale sector makes an important contribution
to our overall production, provides gainful employment
and also contributes to our export effort. It is the
declared policy of this Government to free the small
scale industry from the rigours of cumbersome procedures.
In line with this objective, I have radically simplified
the scheme of excise duty concessions for the small scale
units. I intend to continue the full exemption from duty
on clearances upto Rs.30 lakhs in a financial year.
Thereafter, a small scale unit would be required to pay a
flat rate of excise duty on clearances beyond Rs.30 lakhs
and upto Rs.100 lakhs, if the small scale unit does not
avail of any modvat credit on duty paid inputs. The flat
rate of duty will be 3% ad-valorem on clearances between
Rs.30 to Rs.50 lakhs and 5% ad-valorem on clearances
between Rs.50 to Rs.100 lakhs. The flat rate will apply
for all specified goods to which the small scale
exemption scheme is applicable. In the revised scheme of
exemption, the small scale units will not be required to
maintain complicated records for availing modvat. They
will also not be required to determine the classification
- In order to curb avoidance from payment of duty, I have
decided to exclude a few items like cotton yarn and
texturised man-made yarn from the purview of the SSI
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