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Metal processors deplore Union Budget

By Our Special Correspondent

COIMBATORE, MARCH 2. The metal processors have deplored the Union Budget as being "harsh" on the Small Scale Industries (SSIs).

In a statement, P. Virendrakumar, president of the Metal Processors Alliance, lamented that a benefit traditionally enjoyed by the SSIs since the advent of Modvat had been withdrawn by rescinding Notification No 9\2003 (under which an SSI unit could avail of credit and pay 60 per cent of the normal rate of duty up to the value of the clearances of Rs one crore).

Two options

He pointed out that now the SSI units had only two options — either avail of full exemption up to Rs. one crore (without Cenvat) clearances or pay duty from day one.

"It is very hard to compete with the large industries".

An SSI unit using steel would lose Rs. 6.4 lakhs (40 per cent of the 16 per cent on Rs one crore), he contended.

Duty forced

He said that even the concession availed of by the SSIs under notification No 9\2003 had been withdrawn thus forcing them to pay 60 per cent of the normal duty.

Further, the SSI units outside the duty purview were hit by another procedural blow.

He said that as per the notification No 36\2001, the SSI units availing of full exemption were also exempted from registration.

They were, however, required to file a declaration when their clearances reached Rs. 90 lakhs (exemption limit minus Rs. 10 lakhs).

Now this notification had been amended to make the requirement of filing a declaration when the clearances crossed Rs. 40 lakhs (exemption limit minus Rs. 60 lakhs).

"Now, every SSI unit having a turnover of Rs. 40 lakhs would have to file a declaration with the Divisional Office".

He lamented that the excise duty on steel had been "silently" raised from 12 per cent to 16 per cent and the Government would mop up about Rs. 4,000 crores annually by this increase.

`SSI units sidelined'

Pointing out that the exemption limit of Rs. one crore for SSI units was fixed in 2000, he said: " in real terms, for today's value, it should be at least Rs. 1.5 crores.

While the Union Finance Minister was liberal in granting all kinds of concessions to the big and the mighty, he did not extend the same treatment to the SSI units," he alleged.

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