Finmin told to correct excise duty exemption

New Delhi, Apr 27 | Updated: Apr 28 2007, 07:07am hrs
A Parliamentary panel has asked the finance ministry to correct the misuse of excise duty exemption in the small scale sector. It has also suggested to form an inter-ministerial group to plug the loopholes leading to the misuse.

It has also been revealed to the panel that nearly 85% of the small scale units are unregistered and that their registration was not compulsory for availing of duty expemption. Finding the argument unconvincing, the panel maintained that registration of the units will ensure their authenticity for availing duty exemptions.

A Public Accounts Committee reportConcession meant for Small Scale Industries availed by large scale manufacturers revealed that the concessions for the small scale units were being availed of by the bigger players by taking advantage of exclusion clause in the scheme. Following the retention of the exclusion clause, relating to branded and export goods enabled 278 large manufacturers to derive unintended benefit of duty exemption of Rs 40.41 crore during financial years from 1999-2000 to 2003-2004.