Target is to make our auto industry No. 1, says Gadkari

CARMAKERS HAVE STEPPED in to bear part of the compensation cess burden that auto dealers are saddled with after the GST 2.0 announcement.

- SWARAJ BAGGONKAR

Sources from the dealer community said Mahindra & Mahindra (M&M), Volvo Cars, JSW MG Motor, Tata Motors and Toyota Kirloskar have agreed to take a part of the financial burden, which is collectively valued at an estimated ₹2,500 crore on an inventory of 600,000 units.

"Most original equipment makers (OEMs) are on board to help dealers get out of this situation to ensure we metal out the stock that we have on high-cess cars," a senior executive of the Federation of Automobile Dealers Association (FADA) told FE.

The government has announced a reduction of GST on small cars from 28% to 18%. While the cess on small cars is 1% or 3%, the same on all remaining cars is between 15% and 22% in addition to the GST which will now be at 40%.

"If we don't liquidate the cars before September 21, the hanging sword will come down heavily on us. As of today, there is no one from the government who is giving us any solution on it," said the executive.