A delegation from the Federation of Industrial & Commercial Organisation (FICO) met Punjab Industries Minister Sanjeev Arora and submitted a memorandum seeking automated and timely GST refunds, citing severe working capital stress across key manufacturing sectors.
According to the industrialists, the government has been delaying GST refunds arising from the inverted duty structure, where raw materials attract 18% GST, while finished goods such as bicycles, sewing machines and agricultural implements fall under the 5% GST slab. This mismatch, they said, has resulted in large refund amounts being blocked by the government, significantly tightening cash flows.
Industry representatives stressed that the withheld refunds belong to the taxpayers and must be released immediately to prevent further financial strain. Many firms are already facing a working capital deficit, forcing them to overuse bank credit limits and bear higher interest costs, the FICO president noted. He urged the government to instruct GST authorities to enable automatic refund release once returns are filed.
Industry Seeks Simplified Verification to Improve Ease of Doing Business
The FICO delegation also raised concerns over the department's current four-stage purchase verification process, stating that notices are being issued even when suppliers are genuine and transactions are fully compliant. They argued that legitimate businesses are being inconvenienced unnecessarily despite fulfilling all statutory obligations.
To streamline compliance and reduce harassment, the delegation recommended trimming the verification process to three stages, which they said would significantly enhance the ease of doing business in Punjab.
Minister Sanjeev Arora assured the delegation that the concerns would be reviewed with the relevant GST officials.
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