Cenvat credit for ssi in central excise act

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This query is : Resolved

Rattan Yadav (Querist)

31 August 2011 Hi Sir,

I have read that, if a Small Scale industy has a turnover upto Rs.400 in preceeding year, than it shall be exempt from paying excise duty for a turnover upto Rs.150 Lakhs and excess over it shall be chargeable to excise duty.
It is also said that if SSI avails above exemption it will not be allowed CENVAT credit for inputs used.

Now my doubt is with regards to 2nd paragraph.
I want to know upto what limit SSI cannot get CENVAT CREDIT, if it avails the exemption.

(1) Is it upto the turnover of Rs.150 lakhs it cannot get CENVAT CREDIT ??
o

(2) Is it for the complete turnover it has in that particular year for which it cannot get CENVAT CREDIT ??

Rattan Yadav

Rattan Yadav (Querist)

31 August 2011 Source document link https://indirect-taxation-excise-custom-gst.blogspot.com/

Various concessions are given to small scale industries to encourage their growth and also on account of administrative convenience. Since Excise is a duty on manufacture, it is payable even by a small unit manufacturing the goods. However, it is Government’s policy to encourage growth of small units. Moreover, it is administratively inconvenient and costly to collect revenue from numerous small units. Applying ABC principle, the revenue collected from small units would be negligible compared to the efforts and administrative costs involved. The Govt. has therefore, given various concessions to small scale industries (SSI). The most important notification giving these concessions is notification No. 8/2003 dated 1-3-2003. SSI units whose turnover is less than Rs. 4 crores are eligible for the concessions. If SSI unit does not avail Cenvat on inputs, turnover upto Rs 150 lakhs is fully exempt (The limit was Rs 150 lakhs upto 31-3-2007). If SSI unit avails Cenvat on inputs, it has to pay full normal duty on all its clearances.