cenvat on capital goods by unit availing ssi exemption

[Priyesh Agrawal]

Dear Sir,

 

A unit is availing benefit of ssi exmeption for year however the receipts crossed 10 lakhs limit in dec. Can he avail cenvat on capital goods which was purchased in the month of May....according to my concept he can avail 100 percent cenvat in year of purchase only after he starts charging Service Tax... 

 

Thanks & Regards

AI Summary

Can SSI units claim full CENVAT credit on capital goods after exceeding the 10 lakh limit? Rule 4(2)(a) clarifies. A query was raised about whether a unit availing SSI exemption can claim full CENVAT credit on capital goods purchased in May, after exceeding the 10 lakh limit in December. A response clarified that the query likely pertains to a service provider, referencing Rule 4(2)(a) of the CENVAT Credit Rules, 2004. It states that only 50% of CENVAT credit can be claimed in the purchase year unless specific conditions are met. The remaining credit can be claimed in subsequent years. Another participant concurred with this explanation.