- Piyush Goyal will raise GST issues affecting automobile dealers with the Finance Ministry
- Auto dealers hold significant cess balances that cannot be utilised under current GST law
- GST 2.0 subsumes the earlier compensation cess regime for automobiles
Commerce and Industry Minister Piyush Goyal, while speaking at Federation of Automobile Dealers Association event on Wednesday, said he will raise the GST-related issues impacting automobile dealers with the Finance Ministry.
"I'm sure they're taking it up with the Finance Ministry...I'll also take it up with the ministry in terms of finding an amicable way forward," Goyal said.
Goyal's response comes after auto dealers flagged concerns regarding the treatment of cess balances.
While GST 2.0 subsumes the earlier compensation cess regime for automobiles, the dealers presently hold significant, validly-availed cess balances in their electronic credit ledgers. Once no further cess liability arises, these balances cannot be utilised against CGST/SGST/IGST under the current law, FADA President C S Vigneshwar wrote in a letter to Finance Minister Nirmala Sitharaman on Monday.
Separately, Goyal said that while the government will be protecting and supporting domestic manufacturers, there will also have to be "fair competition."
"Competition brings efficiency, helps improve product quality and ensures that customers get choices. Therefore, we're working to see a proper balance between protection and newer OEMs (original equipment manufacturers) coming into the Indian market," he said.
"If we want to grow manufacturing, it will happen once other global companies get a taste of the Indian market. It's important that they get to try out their products in India, before they come and invest. Our effort is to expand the market, demonstrate resilience in our supply chains," the minister added.
The GST Council Meeting had recently declared a new tax scheme where the GST rate on petrol and petrol-hybrid, liquified petroleum gas, and compressed natural gas cars (not exceeding 1200 cc and 4000mm) will be reduced from 28% to 18%.
Electronic vehicles will continue to have 5% GST, with no changes. All automobile parts will have a uniform taxation rate at 18%.
This policy shift is expected to boost growth for the automobile industry, as it coincides with the upcoming festive season, a period traditionally marked by strong consumer demand.
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