The Federation of Industrial & Commercial Organization (FICO) has slammed the Punjab government over prolonged delay in releasing GST refunds to manufacturers and commercial units. The industry body has demanded urgent intervention from the state leadership, warning that continued delays could push the industrial sector towards agitation.
The representation was led by FICO president along with general secretary, who demanded from Punjab finance minister Harpal Singh Cheema and industry minister Sanjeev Arora relief to the industry. According to FICO, refunds have been pending for almost several months, causing a severe financial strain on the industrial units.
He stated that the issue stems primarily from the inverted duty structure under the Goods and Services Tax (GST). “Finished products like bicycles, sewing machines, and agricultural implements fall under the 5% GST slab, while raw materials are taxed at 18%. This imbalance leads to large amounts of input tax credit getting stuck with the government. That money belongs to the industry, and withholding it is affecting our operations,” he said.
Industry members argued that withholding refunds had created a significant working capital deficit, forcing manufacturers to over-utilize bank limits to sustain operations. As a result, businesses are paying more interest to banks, adding to financial pressure in a period already affected by market uncertainty.
General secretary of the organisation, while reiterating the organization’s demand, said the delay was unjustified and must be resolved immediately. “The GST refunds are not a subsidy or a government benefit; they are the industry’s own money. Keeping it pending for months is deeply unfair. The government must direct GST officials to release refunds automatically once returns are filed,” he said. Industry members added that the delay was creating avoidable hardship for MSMEs, exporters, and manufacturing units.
Members urged the state government to step in and streamline the processing system so that taxpayer refunds did not depend on repeated follow-ups or manual approvals.
The industry body also cautioned that failure to address the matter could lead to collective action. “If the refunds are not released soon, the industry will be forced to stage a protest. We hope the government intervenes before the situation escalates,” he warned.
They appealed for a policy mechanism that allowed automatic release of refunds immediately after the filing of GST returns, arguing that such a system would restore confidence among manufacturers and prevent future financial disruption.
Source from: https://timesofindia.indiatimes.com/city/ludhiana/fico-demands-immediate-release-of-gst-refunds/articleshow/126207461.cms
