LUB national president Sushil Gupta said the government should further strengthen the SSI sector by raising the excise limit. The excise duty with MODVAT on units with a turnover between Rs 3 crore and Rs 4 crore should be 8%, for Rs 4 crore to Rs 5 crore, the duty should be 12% and for units with more than Rs 5 crore turnover, the government should charge 16%, he said.

Mr Gupta said the exemption limit based on MRP basis in pharmaceutical SSI units should be replaced by cost price as declared by the units from time to time. The micro or SSI units, which were presently not availing MODVAT credit, should be compensated by refunding 50% of excise duty paid on inputs, he said. The SSI units should not be liable for payment of service tax on transportation of goods as inputs or finished goods.