FADA seeks re-inclusion of auto dealers under MSME ambit

The Federation of Automobile Dealers Associations (FADA) on Tuesday sought re-inclusion of automobile wholesale and retail trade, including workshops, under the ambit of MSME Act in order to help the sector come out of severe financial stress.

Auto dealerships used to fall under MSME sector, but were excluded from the same after government issued a notification in 2017.

"The government few days back announced a 3 lakh crore collateral-free automatic loans for MSME sector. There were also other benefits including reclassification of the MSME definition.

"While companies falling under the Act will be able to avail the benefits, auto dealers are excluded out of the same due to a 2017 notification," FADA President Harsharaj Kale told PTI when contacted over the matter.

Auto dealers were earlier allowed under the MSME definition and their workshops in most cases operate under the rules of Factories Act, he noted.

"Re-inclusion of our businesses under the MSME ambit is a long pending demand and FADA has been strongly following up with government regarding this," Kale said.

The subsidies and incentives received under the MSME division will provide much needed relief to the sector which provides direct and indirect employment to lakhs of people, he added.

Kale said that during the latest round of meetings on the matter, Union Minister Nitin Gadkari had assured review of the 2017 circular and re-inclusion of auto dealers back into MSME.

Kale said most of the auto dealerships, barring the ones in metro cities, are small and medium family-run enterprises.

"We are quite hopeful of a positive outcome as review of classification of various sectors is under way and auto dealers qualify the requirements of a MSME, and till 2017 were also a part of the same," he added.