Excise Duty on Capital Goods

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pradip (Querist)

02 November 2010 suppose one of the SSI unit or small unit which are not registered as SSI, purchase machinery and paid excise duty alongwith cost.unit not registered under excise act, unit borrow money from bank at higher interest rate to purchase machinery , in this case small scale unit which not get any benefits for excise paid on capital goods because unit is not registered.
please tell me way how such excise duty burden reduce by small scale unit.
loss for SSI: No Cenvat Credit and also cost increase due to Excise Duty on Capital Goods and also interest on loan from bank
please help me how i reduce loss.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

03 November 2010 Only where the buyer of manufactured products of the SSI are able to avail the set off of central excise duty , the availment of credit on capital goods, inpouts and input services would be benefecial as the central excise duty to be charged on goods can be paid by adjustment agains all the credits availed instead of payment in cash.

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CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)

03 November 2010 You have calculated all the losses, If you have not taken registration under SSI, you can charge the duty on your customer and that can ve adjusted by input credit. So ultimately , you are recovering the duty from your customer.

Interest on bank loan, It is a part of busniss structure. No body invest all the money from own.

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Prabhakar

Prabhakar (Expert)

23 November 2010 Payment of taxes is compulsary as per law and it cannot be treated as loss. Cenvat availment is a benifit if registered under central Excise. Since you an SSI unit, cenvat availemnt benifit is not available for you. thats all.. .

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