The Federation of Automobile Dealers Associations (Fada) has written to Prime Minister Narendra Modi, seeking a solution to the matter of the compensation cess before September 22, when the second phase of GST kicks off.
The automobile industry is expected to see a hit of Rs 2,500 crore due to the removal of the compensation cess on high-end cars.
In a letter to Modi on September 8, Fada wanted the balance in the compensation cess credit ledger as on September 21 to be transferred to the credit ledger of integrated GST/central GST.'Such balance may then be utilised for discharge of regular GST liability (CGST/ SGST/IGST),' the letter said.
It added that GST 2.0 was a once-in-a-generation reset meant to simplify life for citizens and small businesses.
"Ensuring a clean bridge for compensation cess credits will make implementation truly glitch-free, sustain confidence among micro, small and medium enterprises, and accelerate reform's demand impulse from consumption, higher capacity utilisation, investments and jobs. In short, a small administrative step now will unleash the full multiplier you have envisaged," said C S Vigneshwar, president, Fada, in the letter.
At present, dealers have an inventory of around 600,000 vehicles, which was loaded up in anticipation of the festival rush. The industry body had approached Union Finance Minister Nirmala Sitharaman with the same demand, so that their sales are not affected.
-- Shine Jacob, Business Standard
