Confusion Abounds

Dear friends,

The much-awaited GST has become a reality effective from 1st July 2017. A revolutionary and path-breaking step, heralding a new phase in India’s tax regime, GST will, hopefully, go a long way in avoiding multiplicity of taxes and cascading effect thereof in pre-GST era. However, there are quite a few sore points and grey areas in the GST law, as it stands today, which are causing confusion and concern among the members of business community. The magnitude of confusion can be gauged from the fact that FADA has been receiving loads of queries and issues on various aspects of GST – be it the procedural aspects, conditions attached to various provisions,, rates, classification and compliances  – through the medium of various Whatsapp Groups and otherwise.

While FADA has engaged GST experts to reply to the members’ queries and taken up the concerns of automobile dealers with the appropriate Government authorities, redressal mechanism of the Government is working at snail’s pace. As a result, the apprehensions and worries continue to grip the members of automobile retail trade. 

It is but natural that a paradigm shift of staggering proportions, which GST has brought about, is likely to encounter teething problems and hiccups. Addressing the issues and concerns, arising out of the implementation of GST, with a sense of urgency is the need of the hour. Otherwise, it will have a severe adverse impact on business environment in the country.

Adverting to auto market, after the slowdown in sales in June due to rationalisation of inventories by OEMs at their ends and at their dealerships before the advent of GST and expected reduction in vehicle prices post-GST, the July sales numbers are reassuring. 

As the dust around GST settles down, the auto market is expected to stay on course.  The expectation is not unfounded, as the inflation is sitting low and the interest rates remain benign.  The long-awaited cut in Repo Rate by the RBI by 25 bps – though too little and too late – is expected to give further impetus to the economic activity. The rain God has also been kind and bountiful. The extent and coverage of monsoon rainfall in the country, barring few areas, has largely been good for the second year in a row. With two-thirds of India’s 1.3 billion population relying on agriculture for their livelihood, it is good news for the economy, in general and rural sector, in particular. The flipside is that the performance of services sector, as the latest data indicate, is not something to rave about.

Regarding development in auto retail trade and activities of FADA since my previous column, I am happy to inform that FADA has created 30 Statewise/citywise Whatsapp Groups that have become important medium for the sharing of information and experiences amongst members of automobile dealer fraternity spread across the country. The chats within the Groups have been quite helpful in addressing the queries and concerns relating to GST in particular. Through these Groups, members are in the loop as to what is happening in the auto retail trade at the State and national levels. Members across the country are constantly engaged with FADA and their fellow dealers across the State. What is heartening is that these Whatsapps Groups have also promoted camaraderie and fellowship amongst the automobile dealers and united them never seen before.

You will be glad to know that programme of FADA’s 53rd Annual Session and AGM is being finalised. The programme will be circulated to all members as and when finalized. All FADA members are cordially invited to attend FADA’s 53rd Annual Session and AGM.

Kindly feel free to send your suggestions and inputs, if any, for further strengthening the activities of FADA and making them more meaningful for the automobile dealers at large.

With best wishes,

Yours sincerely,

John K Paul

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