How GST Is Killing The Bicycle Industry In Punjab While Officials Remain Clueless
The state government still hasn’t refunded approximately $100-120 million collected as VAT in previous years.
According to a report by Asia Times, as the goods and services tax (GST) was rolled out in July last year, production in a vast number of companies has been significantly low due to delay in tax refunds. The story of the bicycle industries located around Ludhiana in Punjab is not any different.
Gurmeet Singh Kular, managing director of Darshan Kular Cycle Industries, Punjab said that he is awaiting a tax refund of $300,000.
“In Punjab, there are around 4,500 bicycle and bicycle parts units with a turnover of $950 million a year. About 7-8% of the total turnover, $70-80 million, is being held up by the GST authorities,” says Kular, who is also the president of Federation of Industries and Commercial Organisations (FICO).
“The companies are being forced to use cash and credit facilities to pay tax,” he added.
Kular states that in the first year of GST, the production in the bicycle industry fell by 30% to 50%. For some bicycle companies, the turnover dipped by almost 70%.
He also claimed that the Punjab state government still hasn’t refunded approximately $100-120 million collected as value added tax (VAT) in the previous years.
Arun Kanwal, president of the District Taxation Bar Association told AT, “The online system for filing GST returns and claiming refunds is incomplete, [and] sometimes it doesn’t work. There is a mismatch of data on turnover and tax in most cases.
Officials are not fully conversant with the online system, rules and regulations and, have been delaying GST refunds. The GST department has [only] disbursed refunds of about $50-60 million of the more than $300 million pending claims in the state.”
The apparel industry has also been facing serious problems since the change in the tax system, claims Sukhdarshan Jain, president of Knitwear & Apparel Manufacturers Association.