FICO Submits demands to GST Council

Ludhiana, August 2, 2017: Federation of Industrial & commercial organization popularly known as FICO submitted demands & suggestions to GST Council. In a meeting held under the Chairmanship of S. Onkar Singh Pahwa Patron in Chief FICO along with S.Gurmeet Singh Kular President, FICO submitted the following suggestions:

1 Uniform GST on Bicycle & its parts:
Bicycle & parts have been taxed at 12% in GST, but there are few anomalies in it, parts of bicycle like cycle steel balls, bell & lock has been brought in 18%, patch roll for puncher has been brought in 28%, we request that universal GST should be charged at all the bicycle & parts.

2 Input Tax Credit to Bicycle Industry:
On 30th June 2017, GST was imposed on bicycle & parts with 12% as GST. Bicycle & Parts are made from steel where the small manufacturers have already paid the excise duty as well VAT, but the manufacturer has not been granted input tax credit on component in stock but this concession has been allowed to traders. We request that uniform concession be allowed to manufacturers as well as traders i.e. 40% of the GST .
Approximately 70% of material used to manufacturer these components is duly 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 date.

3 GST on Advance Payment:
The payment received as advance are taxed 12% before dispatching the material, at time of placing the order. But before dispatching the material it is not feasible as sometimes the order is cancelled or postponed. We request that the GST should be charged after billing the material.

4. Duty Drawback to Exporters:
Under GST regime, the composite rate of duty drawback will not be available after 30.09.17 and only customs portion along with credit of CGST/IGST will be allowed. The customs portion of DBK is only 2% in case of Complete Bicycle single speed (DBK Sr. No. 871201B) whereas actual customs duties forgone on imported components used in these bicycles is 6% to 7%. Hence, customs portion of DBK for complete bicycles single speed should be enhanced accordingly so that exports are not suffered. As per provision of Section 140(3) of CGST Act, 2017 read with Rule 4 (a) (ii) of CGST Rules, 2017, credit of 40%/60% is allowed to registered person other than manufacturers. In case of bicycle exports, the exporters are purchasing goods from tiny & small manufacturers. These manufacturers were purchasing inputs from traders who were not registered with Central Excise & not passing on Cenvat Credit of Central Excise duty paid. If these manufacturers are not allowed deemed credit, their products will become uncompetitive in market & they will not be able to sell their goods lying with them as on 30.06.17. So, it is requested that benefit of deemed credit be extended to manufactures also.
Earlier exporters were procuring goods/raw material that was meant for export under various exemption schemes like CT-1. If someone is procuring/importing goods for exports then such purchase should be exempted from taxes under GST regime on same lines as earlier so that much needed working capital of exporters is not blocked in taxes and India exports can become more competitive in global market. Although guidelines for refund of IGST in case of export has been issued, yet it will not solve the issue of working capital as practically it will take 60-75 days to get refund of IGST on exports. Earlier it was promised to refund GST within 7 days from refund claim in case of exports. In our case on an average Rs.3.50 crores additional working capital will be blocked under GST refund mechanism for exports.

Amongst Present Were Sh. Onkar Singh Pahwa CMD Avon Cycles Limited, Sh. Gurmeet Singh Kular President FICO, Sh. Ravinder Arora Convener Industrial Cell BJP, Sh. Sushil Bhakoo CA, Sh. Sanjeev Gupta Nice Exports Private Limited, Sh. J. R. Singhal Eastman Cast & Forge, Sh. Umesh Kumar Narang Apran International, Sh. Rajeev Jain Secretary FICO.