Piyush Goyal: Govt ensuring GST cuts benefit consumers

Union Commerce and Industry Minister Piyush Goyal on Wednesday expressed hope that the automobile industry will honestly pass on the benefits of the recent Goods and Services Tax (GST) rate rationalisation to consumers, while assuring that the government is working to resolve the issue of compensation cess on unsold stocks lying with dealerships. Speaking at the 7th Auto Retail Conclave organised by the Federation of Automobile Dealers Associations (FADA), Goyal said, “I hope you all will give good deals to consumers as families will come in larger numbers from September 22. I hope you all honestly pass on the benefits of the GST reductions to the consumers.”
New GST Slabs for Automobiles 
As per the GST changes, internal combustion engine (ICE) cars and two-wheelers now fall under two slabs — 18% and 40%. Three-wheelers and commercial vehicles (CVs) are placed in the 18% slab. Importantly, there is no cess on automobiles anymore.
Earlier, ICE cars attracted 28% GST plus a cess of 1% to 22% depending on vehicle type, while ICE two-wheelers carried 28% GST with up to 3% cess. Three-wheelers and CVs faced a flat 28% GST. In contrast, electric vehicles (EVs) continue to remain in the 5% slab, and hydrogen fuel cell vehicles (FCEVs) have been reduced from 12% to 5%, both without cess.The new rates will be effective from September 22, coinciding with the Navaratri festival season, when demand for automobiles typically surges.
Addressing Dealers’ Concerns on Cess 
Goyal acknowledged that the transition has raised concerns for dealers who have already purchased vehicles at the older tax structure, with an estimated Rs 2,500 crore in unclaimed cess at stake. Dealers have urged the government to create a mechanism for cess refunds.The finance ministry is taking up the issue, and I will also discuss it further. Whenever there is a transition, there are difficulties OEMs and dealers must also work together to find an amicable solution. While the government is engaged, OEMs too have a responsibility in this matter,” Goyal said.
C S Vigneshwar, President of Federation of Automobile Dealers Associations (FADA), noted that dealers should not not be penalised for holding stock bought under the previous regime. He said that while legal recourse may be considered, the industry continues to seek a workable solution with the government to remove uncertainty before the new rates come into force.
Calling the move “path-breaking,” Vigneshwar added that the reform would bring price reductions, revive consumer demand, and strengthen the automobile market. “We have already seen an increase in enquiries and customer footfall,” he said.

(Business Correspondent)