Kular meets Union FM regarding problems being faced by industry with regard to GST

Ludhiana, July 15, 2017: Gurmeet Singh Kular, President, FICO today met Arun Jaitley, Union Finance Minister regarding problems being faced by the industry with regard to GST.
During FM’s visit here on Saturday, Kular submitted him a memorandum.
The memorandum reads as under:

“1. Deemed Input Tax Credit to Bicycle Industry: - Sir, we would like to draw your kind attention towards anomalies in eligibility criteria for credit on goods of bicycle components like Handle, Saddle, hub, paddle, Rim, Chain, frame, Fork etc. held in stock on appointed day. As these parts are exempted from whole of excise duty, hence credit of eligible duties embedded in cost is not available to dealer/traders and to manufacture who procure these components from outside as intermediary products as per section 140(3) of Transition provisions of CGST Act, 2017. But however, manufacturers of these components are eligible to get credit of eligible duties of inputs contained in finished goods held in stock on appointed day as per section 140(3) of CGST Act, 2017. Further as per condition (I) of Rule 3(b) of transition provisions, traders/dealers are entitled to get credit @ 40% or 60% as the case may be, only if such goods were not wholly exempted from duty of excise specified in First Schedule to the Central Tariffs Act, 1985 or were not Nil Rated. Hence small trader/ dealers of bicycle parts and also manufacturers who procure these components from outside parts as intermediary products have been deprived off from otherwise rightful claim. Approximately 70% of material used to manufacture these components is duty paid and the same is embedded in the cost of the component. Anomaly is that credit of the same is not available for inputs held in stock on appointed day. Sir, you will appreciate that the government is very much concerned to check increase in prices in GST regime and also keen to pass on the benefits to the customer. But however these anomalies in transition provision are hindrance to achieve the objective. We therefore request your good self to address our genuine issue elaborated above and advise suitable amendments in transition provision & allow manufacturer to take the input tax credit.

2. Uniform GST: - Bicycle industry is covered under 12% GST, but some items used in manufacturing process of bicycle like cycle lock, bell, steel balls are covered under 18%, which makes it difficult to access, so we request you that all bicycle industry should be covered under 12%. also same problem faced by Sewing Machine Parts Industry

3. VAT Refund: - With the implementation of Goods & Service Tax based Taxation System, Industry’s VAT refunds at least till 31.03.2017 should be processed and refunded at the earliest so that the capital of the industry can be utilized at the faster pace. FIFO (First In First Out) system should be exempted while making refunds to facilitate the industry in this crucial phase of change over, the VAT Refunds should be made at the earliest.

4. C- Forms: - Form C should be exempted while making refunds to Tax Payers as Old Refunds are still pending with the department, Now with implementation of GST, C- Forms is abolished, so we request you C- Forms should be exempted as Huge amount of Industry is stuck with the government. Tax Refunds should be processed at the earliest so as to facilitate the industry.”