FICO Demands 5% GST on Steel and Plastic Raw Materials to Save Small-Scale Industry
The Federation of Industrial & Commercial Organization (FICO) has urged the Government of India to reduce GST on steel and plastic raw materials used in bicycles and bicycle parts to 5%.
City Air News
Sep 5, 2025 08:02
0
Ludhiana, 5 September 2025: The Federation of Industrial & Commercial Organization (FICO) has urged the Government of India to reduce GST on steel and plastic raw materials used in bicycles and bicycle parts to 5%.
Gurmeet Singh Kular, President FICO, along with K.K. Seth, Chairman FICO, Rajeev Jain, Senior Vice President FICO, and Avtar Singh Bhogal, Executive Member FICO, warned that without this relief, micro and small manufacturers may not be able to survive.
In a joint statement, FICO leaders welcomed the government’s decision to reduce GST from 12% to 5% on bicycles and their parts, calling it a step that will enhance purchasing capacity and bring much-needed relief to the industry.
However, they cautioned that the disparity between GST on raw materials (18%) and finished products (5%) could prove disastrous for small manufacturers. With value addition in bicycles and parts being only 2–3%, the inverted duty structure creates a 13% working capital deficit. “The larger the production, the greater the deficit, which severely impacts small-scale units,” they stated.
FICO has therefore appealed to the GST Council and the Union Finance Minister to align GST on raw materials, especially steel and plastics, with that of finished goods at 5%. This, they emphasized, is the only way to ensure that both consumers and the bicycle industry truly benefit.
