GST cuts boost auto sector, dealers hope for quick cess resolution

Auto dealers expect a boost in the second half of FY25 following GST cuts on vehicles and parts, which aim to improve affordability

If one walks into a car showroom on Friday, dealers are unlikely to offer much clarity on the on-road price of any vehicle, said an office bearer of the dealers’ body.

 

“Within a week, however, we expect clarity on the issue of compensation cess that dealers have already paid while buying vehicles from original equipment manufacturers (OEMs). The impact of this cess alone is around ₹2,500-3,000 crore for dealers,” said C S Vigneshwar, president of the Federation of Automobile Dealers Associations (Fada). He added that dealers are holding an inventory of around 600,000 passenger vehicles (PVs), or about two months