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Automakers have urged the government to implement the proposed GST rate cuts before the festival season, warning that delays could hurt sales during the industry’s peak months.
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BHAWIKA CHHABRA
Automakers have urged the government to enforce the planned GST rate cuts before the festive season begins, warning that consumers may otherwise delay purchases and weaken sales during the industry’s most lucrative months. These concerns were conveyed to the government during a closed-door meeting on Friday, attended by senior officials from the Ministry of Finance, Central Board of Indirect Taxes and Customs (CBIC), Central Board of Direct Taxation (CBDT) and the Goods and Services Tax Network (GSTN).
The discussions, held as part of the Society of Indian Automobile Manufacturers’ (SIAM) second Automotive Taxation Conference 2025, took place against the backdrop of growing anxiety among automakers and dealers that buyers might hold back spending until new rates take effect.
Senior govt officials attend closed-door meet
Senior officials at the meeting included Shashank Priya, Special Secretary and Member (GST, CX & ST), CBIC; Vivek Ranjan, Member (Tax Policy & Legal), CBIC; Bhaskar Goswami, Joint Secretary, CBDT, Ministry of Finance; and Nisha Gupta, Senior Vice President, GSTN.
“The government is working towards GST rate rationalisation, towards substantially controlling disputes and boost consumer sentiments. We are looking at early refund of inverted duty structure, focus on more auto-filled data and working on a time frame for reconciliation of credit notes,” said Priya.
Automakers, according to industry sources, pressed for rate reductions to be implemented before Navaratri begins on September 22, ensuring festive sales momentum is not disrupted. They also sought clarification on procedural issues related to input credit.
Game changer
Maruti Suzuki India’s Chief Financial Officer Arnab Roy said: “GST has been a game changer, bringing 99 per cent ease of compliance, removing tax arbitrage, and restoring economic rationale to business planning. There is a need for predictability and stability in tax policy to support long-term investments and R&D for India’s energy transition.”
Hero MotoCorp CFO Vivek Anand added: “India has undergone major reforms in both direct and indirect taxation over the past decade. The next step must be rationalisation of GST slabs and addressing classification and input credit issues to reduce compliance pain and uncertainty.”
Dealers lobby Commerce Ministry for protection
The industry’s lobbying has been reinforced by the Federation of Automobile Dealers Associations (FADA), which has warned of mounting risks at the retail level. In a letter to Commerce and Industry Minister Piyush Goyal, FADA stated that the mere announcement of GST rationalisation had already created uncertainty, with customers deferring purchases and dealers building inventory for festivals, including Onam (August 26), Ganesh Chaturthi (August 27), and Navratri and Diwali in October.
Last week, FADA President CS Vigneshwar, Vice President Sai Giridhar, Secretary Amar J Sheth and CEO Saharsh Damani met Goyal, pressing for a Retail Protection Act and a joint meeting with his ministry and the Ministry of Heavy Industries to safeguard dealer interests.
SIAM stated that the objective of its engagement with the government was to create a taxation landscape that could sustain growth, foster innovation, and underpin the industry’s transition towards clean energy.
Published on August 25, 2025
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