Piyush Goyal says he will take up auto dealers' GST cess issue with FinMin
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Union commerce minister Piyush Goyal on Wednesday said he will take up the Goods and Services Tax (GST) compensation cess issue faced by automobile dealers across the country with the finance ministry to find an amicable solution.
Goyal made these comments at an annual conclave organised by the Federation of Automobile Dealers Association (FADA).
FADA had earlier shot off a letter to Finance Minister Nirmala Sitharaman seeking clarity on the transitional treatment of accumulated compensation cess credits of over ₹2,500 crore. The auto dealers’ lobby also warned of a looming liquidity crunch for dealerships ahead of the festive season.
FADA wants the government to clarify how dealerships across the country would be able claim credit for the taxes they have paid, which the customer will not pay for vehicles sold from September 22, 2025.
"The cess alone accounts for about ₹2,500 crore. That’s not something that dealerships can absorb. We really need to talk to the government. The government needs to clarify how we can claim credit for the taxes which we already paid but may not be paid by the customer,” FADA president C S Vigneshwar told Fortune India.
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About 6 lakh vehicles would likely be impacted by this issue, said Vigneshwar. “The ministry should clarify and they need to do it fast because the festive season is coming. We don’t want our capital to be blocked. There is a lot of interest that we end up paying,” he added.