Mohali industry body flags 6–8-month GST refund delays, seeks CBIC intervention
MSMEs face working capital crunch; automatic processing of fresh claims from November 1 offers little relief on pending dues
Mohali : The Mohali Industries Association (MIA) has sought urgent intervention from the Central Board of Indirect Taxes and Customs (CBIC) to clear GST refunds pending for six to eight months, warning that prolonged delays have triggered a working capital crisis for Punjab’s manufacturing units, particularly micro and small enterprises.
Raising the issue with CBIC Chairman Vivek Chaturvedi during an interactive session organised by CGST, Chandigarh Zone, former MIA president Anurag Aggarwal said eligible refunds due to businesses registered with the Punjab government remained unprocessed, blocking substantial funds in accumulated input tax credit (ITC).
Aggarwal attributed the problem partly to an inverted duty structure following the reduction of GST on tractor components to 5%, while raw materials continue to attract 18% GST. The disparity has led to an accumulation of unutilised ITC and increased refund claims.
Despite compliance with statutory requirements, the pending refunds have strained the finances of industrial units, affecting their ability to pay wages, meet statutory liabilities and clear dues to suppliers. Some units have even been forced to shut operations, the association said.
Responding to the concerns, Chaturvedi said GST refund applications filed from November 1, 2026, would be processed automatically under the new amendments. However, no firm timeline was given for clearing the existing backlog, leaving industry representatives concerned about the immediate relief available to affected businesses.
The association said the proposed changes could streamline future claims but would not resolve the current liquidity crisis unless pending refunds were also cleared on priority. It stressed that GST refunds are a statutory entitlement and that prolonged delays undermine the purpose of the refund mechanism.
MIA president Mukesh Bansal highlighted Punjab’s contribution to the tractor manufacturing sector, stating that the state accounts for nearly 30% of India’s total tractor production. More than 90% of the sector’s ancillary units fall under the micro and small enterprise category, he said, adding that timely refunds were essential to sustaining the sector’s competitiveness and financial stability.
The association also submitted a memorandum to Sanjay Mangal, Member (GST), CBIC, seeking immediate intervention for the release of pending ITC refunds.
The meeting was attended by Manish Sharma, Principal Commissioner, CGST, Chandigarh; Radhe Tallo, Additional Commissioner, CGST, Ludhiana; and Varun Singla, Joint Commissioner, CGST, Chandigarh, besides other officials.
The MIA urged the CBIC to prioritise the clearance of pending refunds and extend the benefits of procedural simplification to existing claims to ease the financial pressure on Punjab’s MSMEs.
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