Baddi industry hit by delayed CGST refund

Meenakshi Verma Ambwani Baddi | Updated on May 03, 2019 Published on May 03, 2019

Medium and small enterprises, which are already facing challenges in accessing affordable credit, have been worst hit   -  Kamal Narang

Companies in the Baddi Barotiwala Nalagarh (BBN) area, one of the key industrial hubs in Himachal Pradesh, are an unhappy lot.

They are peeved about the delays in getting CGST refunds or reimbursements under the scheme of budgetary support in the GST regime.

Industry players said this is adversely impacting the industrial units in the region especially the small and medium enterprises.

The budgetary support scheme was notified in 2017 to extend support to manufacturing units which were earlier availing of central excise benefits under the erstwhile area-based exemption notification in accordance with the various industrial promotion schemes of the government.

Sanjay Khurana, Senior Vice-President, BBN Industries Association and Chairman-CII Northern region SME Committee, said, “Reimbursements for nearly four-five quarters are pending due to shortfall in budget allocations. This clearly indicates that the scheme of budgetary support has been poorly designed.”

According to industry estimates, CGST refunds in the range of ₹275-300 crore are pending for the eligible industrial units in the region.

Industry players said while funds sought by the local Central Tax office were to the tune of ₹500 crore, only about ₹222.74 crore were allocated. Hence, claims for refunds are pending due to non-availability of funds.

The budgetary support is disbursed from budgetary allocation of Department of Industrial Policy & Promotion (DIPP).

Adverse impact

Harish Agarwal, Chairman, CII Himachal Pradesh State Council, said, “The pending CGST refunds of industrial units is adversely impacting the growth and sustenance of industry in the State. The medium and small enterprises, which are already facing challenges in accessing affordable credit, have been impacted the most due to these pending refunds as it puts strain on their working capital requirements.”

The Baddi Barotiwala Nalagarh area houses over 2,000 large, small and medium scale manufacturing units.

Shailesh Aggarwal, President, BBN Industries Association, added, “Under the budgetary support scheme, the government had allocated a specific quantum of budget and now we are being told it has been exhausted and hence refunds are pending. This backlog should be cleared at the earliest and steps should be taken to process refunds in in a timely manner.”

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Published on May 03, 2019
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