Ludhiana, June 22
Punjab’s bicycle industry has urged the state government to release pending GST refunds, stating that delays in processing claims have created a serious working capital crisis for manufacturers and pushed several units towards financial difficulties.
The United Cycle and Parts Manufacturers Association said bicycle manufacturers are facing liquidity challenges due to a large number of GST refunds still pending with the Punjab government.
Former president of the industry body DS Chawla said the Center’s decision to reduce GST on bicycles from 12 percent to 5 percent had benefited consumers and encouraged the use of an eco-friendly mode of transport.
However, he said manufacturers continue to face difficulties as key raw materials, including steel, rubber, plastic granules, paint, chemicals, and packaging materials, are subject to 18 percent GST.
Due to differences in tax rates, manufacturers must claim refunds for excess input tax paid. Chawla said delays in processing these refunds have blocked significant funds and affected companies’ cash flow.
He said the shortage of working capital has forced many manufacturing units to depend on loans, resulting in higher interest costs.
Chawla also raised concerns about irregularities in the refund process and called for a fully digital, faceless system to improve transparency.
“Since GST returns are already filed digitally, the refund mechanism should also be processed electronically to ensure transparency and reduce corruption,” he said.
The association said the issue is affecting both micro, small, and medium enterprises and large manufacturers. It warned that continued delays could impact production, employment opportunities, and government revenue.
The industry body appealed to Punjab Chief Minister Bhagwant Mann and the state Finance Minister to clear all pending GST refunds as a priority and ensure the timely processing of future claims.
It also demanded strict action against officials responsible for unnecessary delays in releasing refunds.
