CICU urges action for pending GST, VAT refunds

The Chamber of Industrial and Commercial Undertakings (CICU) has issued a strong demand for immediate action from the CM Bhagwant Mann on clearing the significant backlog of pending Goods and Services Tax (GST) and Value Added Tax (VAT) refunds that are critically impacting numerous industrial units across the state.

Since the implementation of GST in 2017, many businesses have been left in limbo, with unresolved cases still pending. The GST refund mechanism is especially vital for industries such as bicycle parts and agricultural machinery, where the input tax paid far exceeds the output tax collected. This situation clearly indicates that VAT has already been remitted and businesses are urgently in need of their refunds to sustain operations.

As the industry faces a severe liquidity crisis, exacerbated by the ongoing economic recession, the urgency for financial relief cannot be overstated.

With Diwali approaching, industries are burdened with additional statutory payments, including bonuses, leave with wages and salaries. The delay in refunds only compounds these financial pressures, threatening the stability and sustainability of many Micro, Small, and Medium Enterprises (MSMEs) that are the backbone of the state’s economy.

Moreover, it has come to our attention that the state Tax Department’s software for processing refunds has been rendered inactive, effectively halting any new refund claims. This bureaucratic bottleneck not only stifled the cash flow of businesses but also undermined the government’s commitment to fostering a conducive environment for growth, CICU said.