*punjab Cycle Industry Warns Of Closures Over Stuck Gst Refunds : D. S Chawla

Jun23,2026 | Jagrati Lahar Bureau |

Cycle manufacturing units in Punjab are facing closure due to delayed GST refunds that have choked working capital, former president D.S. Chawla, United Cycle & Parts Manufacturers Association said Monday.

In a press note, D.S. Chawla said manufacturers pay 18% GST on raw materials like steel and rubber but collect only 5% on finished cycles after the tax cut. The resulting refunds of nearly 13% remain stuck with the Punjab Government, forcing units to borrow at high interest.

Chawla alleged corruption in the refund process and urged CM Bhagwant Mann and the Finance Minister to release pending refunds immediately and make the process faceless. Chawla warned that negative growth in the cycle industry would hurt state revenue and employment.

Chawla said the inverted duty structure is the root cause. While GST on bicycles was reduced from 12% to 5% to benefit buyers, inputs such as steel, rubber, plastic granules, paint and chemicals continue to attract 18% GST.

This leaves manufacturers entitled to refunds of nearly 13% on total sales. With refunds delayed by the Punjab Government, units face a severe shortage of working capital and are paying high interest to financial institutions, the note said.

Chawla also alleged malpractices in the refund system, stating that the issue has been raised with the state government on multiple platforms but remains unresolved.

Demanding urgent intervention, the industry body has appealed to Chief Minister Bhagwant Mann and the Finance Minister to release all pending refunds and ensure future claims are processed without delay. It also called for making the entire refund process faceless to prevent corruption.

Chawla warned that if the cycle industry slips into negative growth, it would directly impact state exchequer revenue and stall employment in Punjab, a state that dominates India's bicycle production.

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