Automotive dealers approach Supreme Court over Rs Rs 2,500 cr compensation cess

The Federation of Automobile Dealers Association has moved the Supreme Court, seeking relief over Rs 2,500 crore compensation cess.

The accumulated compensation cess lapsed on September 22 with new GST norms coming into effect.

"GST 2.0 is a proud reform. But Rs 2,500 cr of genuine, tax-paid Compensation Cess credits now risk lapsing - hurting thousands of MSME auto dealers," the Federation of Automobile Dealers Association (FADA) said in a statement.


FADA has moved the Supreme Court, not against reform, but for fairness and trust, it added.

"Reforms should empower, not erase what's earned," the automotive dealer's body said.

The dealers' concern stems from the unutilised compensation cess balance held in their books, which may not be carried forward under the revised GST framework. The industry body had earlier appealed to Prime Minister Narendra Modi to help tide over the issue of compensation cess.