Overview

• CBIC chairman Sanjay Kumar Agarwal said compensation-cess input tax credit on automobile stocks as of September 22 will lapse and no refund or adjustment will be allowed.
• Dealers estimate up to Rs 2,500 crore could be locked in cess already paid on roughly 600,000 unsold vehicles.
• FADA had sought urgent clarity on the transition, noting dealers hold about 55 days of inventory ahead of the festive sales period.
• Under the new structure, small petrol/CNG/LPG cars up to 1,200cc and small diesel cars up to 1,500cc and 4,000 mm attract 18% GST, while larger cars move to 40% GST with no compensation cess.
• Motorcycles up to 350cc and three-wheelers shift to 18% GST, bikes above 350cc to 40%, and electric vehicles remain at 5%.