GST refund stress: MedTech sector flags cash crunch, seeks relief

New Delhi: India's medical device industry has sought urgent help from the government asking to fast-track GST refund processing to provide relief to the sector reeling under acute financial stress due to the ongoing West Asia war.

A letter has been sent to Piyush Goyal, Minister of Commerce and Industry and revenue secretary. According to industry executives, in most cases, refunds from the GST rate reduction last year are still pending.

According to them the delay is causing acute working capital distress, given the inverted duty structure, where manufacturers pay 18% GST on inputs but charge only 5 % GST on finished devices resulting in large accumulations of unutilised input tax credit. The strain has been aggravated by the West Asia conflict, that drove up input costs, the executives told ET. "The industry is witnessing unprecedented increases in key input costs.