Cess Relief for Auto Dealers Soon: Piyush Goyal Stresses Shared Responsibility

Union Commerce and Industry Minister Piyush Goyal announced that the issue of compensation cess in the automobile sector will be addressed soon after the implementation of GST 2.0. Speaking at the 7th Auto Retail Conclave organized by FADA, Goyal emphasized that resolving this issue is not solely the government’s responsibility; auto manufacturing companies must also actively participate in finding solutions. Dealers are facing challenges due to the cess balance on unsold inventory, which could result in losses exceeding ₹2,500 crore during the festive season.

Both SIAM (Society of Indian Automobile Manufacturers) and FADA have appealed for relief. SIAM has urged the Finance Ministry to reduce the cess burden, while FADA requested that the balance till September 21 be transferred to the IGST/CGST credit ledger for adjustment against tax liabilities. Goyal also highlighted the importance of robust dealer-OEM agreements to prevent sudden exits of foreign companies, citing past disruptions from Ford and General Motors. Notably, Honda Cars and MG Motor have already adopted the recommended model dealer agreement.

Goyal further appreciated the Auto Component Manufacturers Association (ACMA) for fostering constructive dialogue, noting that India’s component industry has grown self-reliant, competitive, and export-ready thanks to their proactive approach.