Excise duty registration & modvat

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Gaurav

Manager

50 Points Posted on 13 December 2012

I am about to start a Steel Fabrication shop as SSI. I want to know the requirements for Excise registration.

Also, I am a bit confused that whether I will have to pay Excise duty for purchase of raw materials although I will not get Modvat for the same since initially I may not be eligible for excise registration. This will increase my production cost & I may not be competetive in the market. What is the way out?

Thanks & Regards

Gaurav Kapoor

Replies (2)

shankar

student

97 Points Posted on 13 December 2012

Dear Gaurav

I think so you aware that we no need to pay the excise duty up to clearnce of 150 lakhs if you opted as SSI and same way you are not eligible for cenvat credit on inputs and input on capital goods upto 150 lakhs clearance.

The following points shoud be considered before opting the SSI exemption.

1. you have to check whether inputs rate of duty and outputs rate of duty - because if the rate of duty on inut is greater than ouput rate of duty it is not better to opt for SSI and same way you will get the input credit on inputs and capital goods.

2. If the rate of duty on Output is greater than input recommended to opt for SSI

3. And we have to think about whether you are paying the duty on all inputs or some of the inputs only.

I think so you are now able to decide to opt for SSI or not.

Gaurav

Manager

50 Points Posted on 13 December 2012

Hi Shankar I need to know that limit of 150L is commpulsary or I can register even if the turnover is less. I would be grateful if I can have a word with you. Regards Gaurav Kapoor