FADA issues Contempt Notice against Tamil Nadu State Transport Authorities

Dear Members,

Over the past month, FADA has continued to advance with focused advocacy, constructive engagement, and meaningful progress across multiple fronts. I am pleased to share key developments that highlight our collective commitment to strengthening India’s retail automobile ecosystem.

One of the most critical matters we addressed was the non-implementation of the amended Central Motor Vehicle Rules, 1989 in Tamil Nadu, despite the Hon’ble Madras High Court’s order dated October 24, 2025. FADA has consequently filed a contempt notice against the Transport Commissioner, Government of Tamil Nadu, in response to Circular No. 46/2025 dated November 19, 2025, which seeks to circumvent and effectively dilute the Court’s directive. We remain firmly committed to ensuring that regulatory reforms are upheld in both letter and spirit, safeguarding the interests of dealers across the country.

A key policy concern that continues to engage our focused attention is the issue relating to Compensation Cess. FADA has approached the Hon’ble Supreme Court of India by way of a writ petition challenging the legality and constitutional validity of Notification No. 9/2025–Compensation Cess (Rate), which nil-rated compensation cess on motor vehicles with effect from 22 September 2025, without providing any transitional or refund mechanism for the utilisation of accumulated Compensation Cess Input Tax Credit. The Hon’ble Court, in its hearing held on 15 December 2025, found a clear prima facie case and has issued notice to the Union of India and other respondents. This development reinforces the legitimacy of dealers’ concerns and once again underlines the importance of policy certainty and tax neutrality. FADA remains fully committed to pursuing this matter to its logical conclusion, to ensure that legitimate dealer credits are protected and that the principles of fairness, equity, and ease of doing business are upheld.

On the capability-building front, under the leadership of Chairperson Ms Rashmi Kale, WiF conducted an engaging Open Discussion on Used Vehicle Business Models. Ms Anusha Kathed, Co-Director, WiF Madhya Pradesh & Dealer Owner, Kathed Motocorp, Indore, and Ms Kanika Agarwal, Director, WiF Uttar Pradesh & Executive Director, Prashanti Automobiles, Pilibhit, shared practical insights and best practices. The session, attended by 18 WiF members, was highly interactive and offered a meaningful learning experience for all participants.

Additionally, FADA Academy, under the leadership of Mr Manish Raj Singhania, Chairman, FADA Academy & Research, continues to scale new heights. I am pleased to share that the Academy is in advanced discussions with Cornell University, USA—an esteemed Ivy League institution—to launch an exclusive 7-day immersive international leadership program for FADA Members at the iconic Cornell campus. This initiative is poised to set a new benchmark in leadership development for our dealer fraternity. I urge my fellow dealer colleagues to share your expressions of interest at the earliest, enabling the Academy to move forward with the next steps.

The Academy also continues its commitment to knowledge enrichment through highly relevant programs. Recently, it conducted an insightful session on the Impact of the New Labour Codes as well as an online program on High-Impact Telesales Skills, both of which were well received by participants.
FADA Academy’s upcoming sessions on Building a High-Performance Sales Culture and its executive program on Artificial Intelligence, Leadership, and Business Excellence in collaboration with IIM Udaipur are thoughtfully designed to help dealerships stay aligned with evolving business dynamics and compliance requirements.

On the employment front, the Academy, in association with ASDC and Hero MotoCorp under Project Saksham, made a meaningful impact through a Job Fair organized in Prayagraj—furthering our ongoing effort to strengthen the industry’s talent pipeline.

The FADA South Zone office, under the guidance of Executive Committee Member Mr Bharat Chordia, conducted a course on Vahan Registration for Used Vehicles in Tamil, offered both offline and online. The program successfully fostered deeper regulatory understanding at the grassroots level.

Friends, returning to state-level events, I am pleased to share that FADA successfully concluded the 20th edition of Vyapar in Kerala—Vyapar Kerala: Together, We Drive into the Future.

Dovetailing with Vyapar, a Townhall Meeting was organised earlier in the day at the same venue. Along with the Chairperson of FADA Kerala, Mr. Manoj Kurup, and Mr. John K. Paul, Past President, FADA and Member of the FADA Governing Council, I had the opportunity to interact with the Executive Committee members of FADA Kerala. The discussion focused on understanding dealer concerns and deliberating on initiatives that FADA should undertake to further dealer interests and strengthen the association. This was followed by a press meet with a select members of the media.

Vyapar Kerala marked the second time Vyapar was held in Kochi, the first being in 2019. The event saw participation from over 200 attendees and featured 10 speakers across 8 insightful sessions.

The event was honoured by the presence of Mr P Rajeeve, Hon’ble Minister for Law, Industries, and Coir, Government of Kerala, as the Chief Guest. Despite a demanding schedule with the Panchayat elections approaching, he graciously addressed the gathering. I sincerely extend my gratitude to him on behalf of the entire dealer fraternity.

In his address, the Hon’ble Minister highlighted that Thiruvananthapuram has already emerged as an automotive technology hub in India. He also emphasized Kerala’s improved Ease of Doing Business ranking, which is expected to attract more investors and generate increased employment opportunities.

In my address, I highlighted key national initiatives undertaken by FADA to drive industry transformation, including Auto Retail Data Transparency, the Model Dealer Agreement, Sustainability and Green Dealerships, Digital Transformation, and FADA Academy’s collaboration with ASDC to establish training centres for skilled manpower development. I also addressed critical issues FADA is actively leading, such as the uniform implementation of the New Central Motor Vehicle Rules, 1989 across the country, and the writ petition filed in the Supreme Court seeking a refund mechanism for the Compensation Cess stuck post GST 2.0 reforms.

My sincere thanks to Mr Nagaraju Chakilam, IPS, Transport Commissioner, Government of Kerala, for his unwavering support to the dealer community. Although he could not attend in person, he joined the event online and addressed the gathering, offering steadfast support in resolving key industry concerns. His engagement greatly boosted morale and contributed to strengthening the overall business ecosystem.

I would also like to take this opportunity to thank the other distinguished speakers at the event: Mr Akhil Mathew, Business Strategist, Beegains; Mr Arindam Lahiri, CEO, ASDC; Mr Hemal N Thakkar, Senior Practice Leader & Director, Crisil Intelligence; Mr Mohammed Jabeen, AI Analyst, Beegains; Ms Rashmi Kale, Chairperson, Women in FADA; Mr Rishabh Sanghi, Chairman, FADA GenX; and Prof Dr Ushy Mohandas, CEO, Dr Ushy’s Wisdom Works. Your insights and contributions greatly enriched the program.

I also wish to express my sincere gratitude to all our partners for their invaluable contributions: Platinum Partner: Rosmerta Technologies Ltd; Bronze Partners: Across Assist; Bank of Baroda, Thrissur Branch; 3M India Ltd; and Wings Infonet Private Limited; and Logo Partners: Axalta Coating Systems India Pvt Ltd; ATS ELGI Ltd; Indian Oil Corporation Ltd; and Nippon Toyota. Your support played a crucial role in the success of the event.

My special thanks to Mr John K Paul, Past President of FADA; Chairperson-FADA Kerala, Mr Manoj Kurup; and all Regional Directors of FADA Kerala for their dedicated support. I also extend my gratitude to Mr Renjith, Administrator, KADA, for providing invaluable assistance in ensuring a seamless event. Finally, I thank the FADA Secretariat, led by Mr Saharsh Damani, for executing yet another successful program.

At the regional level, our state chapters have demonstrated exemplary initiative in driving compliance reforms and engaging proactively with government authorities.

In Chhattisgarh, Chairperson Mr Vivek Garg, together with Mr Manish Raj Singhania, Chairman of FADA Academy & Research, held discussions with Cabinet Minister Shri Kedar Kashyap on key matters affecting the auto retail sector.

In Goa, Chairperson Mr Prashant Joshi actively advocated for the adoption of GSR 901(E) to streamline the sale and registration of pre-owned vehicles through authorized dealers.

Owing to the sustained efforts of FADA Jammu Chairperson Mr Sanjay Agarwal, with the Hon’ble Chief Minister of J&K and the Transport Commissioner of J&K, operational guidelines have been issued by the transport department for regulating the used vehicle business under CMVR—marking a significant milestone for the region.

In Jharkhand, Chairperson Mr Govind Mewar and his team received assurance from the Transport Secretary that the implementation of the new CMV Rules, 1989, would be completed within a month in the state.

In Madhya Pradesh, Chairperson Mr Ashish Pande successfully addressed the challenges dealers faced in registering BH series vehicles through constructive engagement with RTO officials.

In Tamil Nadu, Chairperson Mr. Rajavel S, along with FADA Executive Committee Member Mr Bharat Chordia, engaged with Thiru Dheeraj Kumar, IAS, Additional Chief Secretary & Home Secretary, Government of Tamil Nadu, and Ms R Gajalakshmi, IAS, Transport and Road Safety Commissioner, Government of Tamil Nadu, to discuss the implementation of the new CMV Rules, 1989, and to raise key concerns of dealers.

Each of these achievements reflects the dedication and hard work of our state chairpersons, regional directors, and active members. I extend my heartfelt appreciation to all of you. Together, we are not only navigating the challenges of a rapidly evolving industry but also shaping its future with vision, purpose, and determination.

As we step into 2026, the mobility landscape is changing at unprecedented speed:

GST 2.0, the phasing out of Compensation Cess, and rising compliance expectations will redefine dealership financial planning and working capital structures. Green fuel vehicles are accelerating faster, led by affordability and ecosystem readiness. Rural demand is strengthening on the back of a strong monsoon, stable farm incomes, and more balanced credit availability. OEMs are recalibrating their product mix — from small cars revival to premiumisation in 2W/4W — and dealers will be the fulcrum of this transition.

On the global front, China, Europe and the US are witnessing volatility in EV demand, prompting OEMs worldwide to pivot to flexible powertrain strategies. Mobility ecosystems are getting rewired through connected vehicles, subscription models, battery localisation, scrappage-led circularity, and AI-powered retailing. Supply chains are stabilising, but geopolitical realignments are pushing OEMs to diversify manufacturing — positioning India as a long-term hub for global auto production.

In this environment, auto retail will no longer be transactional; it will be analytical, compliant, digital and value-led. FADA must continue to stay ahead of this curve — with data, advocacy, capability-building and a unified dealer voice.

As we approach the festive spirit and the final lap of the year, I wish each one of you and your families a Merry Christmas and a very Happy New Year in advance. Let us continue steering Indian auto retail with purpose, speed, and integrity.

Thanking you,

Yours Sincerely,

CS Vigneshwar
President - FADA