The Federation of Industrial & Commercial Organization (FICO), a key industry body in Punjab, has launched a sharp critique against the state government for inordinate delays in releasing Goods and Services Tax (GST) refunds to local manufacturers and commercial units. The body has called for immediate intervention from the state's leadership, cautioning that further procrastination might compel the industrial sector to take to the streets in protest.
Financial Strain and the Core Issue
The representation, spearheaded by FICO president Gurmeet Singh Kular and general secretary Manjinder Singh Sachdeva, was presented to Punjab's finance minister Harpal Singh Cheema and industry minister Sanjeev Arora. According to FICO, refunds have been stuck with the authorities for several months, placing a severe financial burden on industrial operations.
Kular pinpointed the root cause as the inverted duty structure under GST. He explained that finished goods such as bicycles, sewing machines, and agricultural implements attract a mere 5% GST, while the raw materials needed to produce them are taxed at 18%. This imbalance results in substantial input tax credit accumulating and getting locked with the government. "That money belongs to the industry, and withholding it is affecting our operations," Kular asserted.
Working Capital Crisis and Unjustified Delays
Industry representatives detailed that the withholding of refunds has precipitated a major working capital shortfall. Manufacturers are being forced to over-utilize their bank credit limits to keep their units running, leading to increased interest payments and compounding financial pressure in an already uncertain market.
Manjinder Singh Sachdeva reinforced the organization's stance, stating that the delays are completely unjustified. "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," he said. He urged the government to instruct GST officials to release refunds automatically upon the filing of returns, eliminating the need for manual intervention and repeated follow-ups.
Call for Systemic Reform and Stark Warning
The industry body highlighted that the delay is causing unnecessary hardship for MSMEs, exporters, and manufacturing units across the board. They appealed for a streamlined, policy-driven mechanism to ensure timely refunds and restore confidence among taxpayers.
FICO concluded with a stern warning. Sachdeva cautioned that if the refunds are not disbursed promptly, the industry will have no choice but to stage a large-scale protest. "We hope the government intervenes before the situation escalates," he warned, urging for preventive action to avoid industrial unrest.
