Copper Cable Industry To Be Taken Off Ssi List

The government is slated to remove copper ingots and copper cables and wires from the selected items list of the Small Scale Industry (SSI) scheme. The policy change is being envisaged after rampant excise duty evasion has been detected in these industries by the revenue department.

According to revenue department officials, most manufacturers, in order to evade excise duties, have taken to the practice of registering themselves within the SSI exemption limit, showing an annual turnover of Rs 30 lakh.

There is almost 100 per cent duty evasion by copper ingot and cable wire manufacturers with most of them operating without licenses, the officials point out.

 

Says a senior revenue official, The excise duty evasion by them is apparent. Most of them register as units whose annual production lies below Rs 30 lakh.

Presently, one tonne of copper is priced at Rs 1.27 lakh and so these units presumably manufacture around 27 tonne of copper wire annually since they lie below the exemption limit. Assuming that one truckload of copper weighs 10 tonne, we have to conclude that these firms manufacture three truckloads of copper wire per financial year which is ridiculous, the official reasons.

According to published reports, the Balaji Copper rolling mill, situated near Delhi, has been availing tax benefits by declaring that its annual production has never exceeded Rs 30 lakh. Like Balaji, the turnover of most manufacturers runs into several crore but on paper lie within the limit of Rs 30 lakh.

Duty evasion in the copper-based industry, which falls under the SSI scheme, has been rampant ever since these items have been categorised under the selected item list. Stocks are clandestinely marketed and most manufactures operate without licenses. Moreover, excise department officers do not visit these premises unless there is a direct order from the assistant commissioner to do so.

Revenue officials are of the opinion that in order to check duty evasion, there should at least be a notional excise duty of some minimum per cent so that manufacturers are forced to maintain records.

Despite there being an annual practice to declare the annual worth of stocks to the excise department before the budget is presented, the evasion has been such that last year on budget day, goods valued at Rs 1.29 crore were seized for illegal removal.

Again last year, the Delhi excise department created a ripple by detecting 31 cases involving goods worth about Rs 4 crore and duty evasion to the tune of Rs 50 lakh. About 16 trucks had also been seized for carrying non-duty paid goods. There is now a concerted move underway to educate transporters so that they refrain from transporting non-duty paid goods.