No. 4/93-SSI Bd. & Policy
GOVERNMENT OF INDIA

MINISTRY OF INDUSTRY
DEPTT. OF SSI & ARI
OFFICE OF THE DEVELOPMENT COMMISSIONER (SSI)
Nirman Bhavan, New Delhi,
Dated 26th August, 1993

To,

  1. Secretary (Industries)
    All States/UTs
  2. Commissioner/Director of Industries
    All States/UTs

SUB: - Activities registrable as Small Scale Industries under the registration activities EARLIER REF. No. 2(3)/91-SSI Bd. 30-9-1991

Sir,

  1. Under the registration scheme for the Small Scale Sector, units if eligible, are registered as Small Scale/ancillary/tiny/EOU/SSSBE units. The registration is done with the Registering Authorities (generally the DICs). Such units can avail of facilities/incentives or concessions given either by the Government of India or by the concerned State Govts.

  1. The explicit enunciation of the type of activities that can be registered as Small Scale Industries is stated in the above mentioned circular of 30th Sept. 1991. The relevant extracts are reproduced below: -

    Small Scale Industries
    It will cover all manufacturing activities of one or more item(s) included in

    1. Schedule-1 of Industries (Development & Regulation) Act, 1951, (65 of 1951)
    2. The list of items exclusively reserved for manufacture in the Small Scale Sector.
    3. Any manufacturing activity which is not covered above in (a) or (b)
                                             E X C E P T
      "The activities which fall within the purview of any Statutory Board or Committee or Special agency viz., KVIC, Silk board, Handicrafts Board, Textile Commissioner, Handloom Board, Coir Board etc."

  2. In practice, the Registering Authority takes the decision to register or not to register a unit. When in doubt, they seek clarification either from the Director of Industries or from this office. Whenever representations are received or clarifications are asked for this office takes a view the registration scheme or not.

  3. Having regard to the types of clarifications asked by various registering authorities, it gives the impression that the registering agencies are not very clear as to the scope of the registration scheme. Particularly, in terms of which activities are/or should be registrable as small scale industry units. It is, therefore, felt that the guidelines are necessary to amplify the meanings attached to various terms used in the said circular of 30th Sept. 1991. The same are being explained as follows: -

    1. Small Scale industries will cover manufacturing activities as enunciated in the circular of 30th Sept. 1991. The 'manufacturing' relates to Scheduled Industries i.e. included in Schedule-1 of the IDR Act, 1951.

    2. To consider whether an activity is a manufacturing activity pertaining to an industry, it is clarified that the activity in the first instance should pertain to an industry covered under Schedule-1 of the IDR Act i.e. the activity must be industrial.

    3. The activity must also be a manufacturing activity wherein "manufacture" is defined as follows: -

      "Manufacture is a process that has the following inclusive characteristics: -

      1. Mechanised process must be involved.
      2. Value added should take place.
      3. The end-product is one that has a distinct name, character or use i.e. there must be a change of form.
      4. The process product must be excisable unless freed from Excise Duty."

  4. The above stipulation is, as before, subject to the condition that the activity should not fall within the purview of any Statutory Board or Special agency constituted for the particular activity.

  5. You are requested to take note of this explanation and bring it to the notice of all registering authorities so that they may use this yardstick to determine whether a particular activity falls within the MSME-DO Registration Scheme or not.

Yours faithfully,

Sd/-
(Raju Sharma)
Director (SSI Bd. & Policy)