{"id":29863,"date":"2025-09-07T13:20:09","date_gmt":"2025-09-07T07:50:09","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=29863"},"modified":"2025-09-14T17:05:18","modified_gmt":"2025-09-14T11:35:18","slug":"2500k-loss-risk-from-compensation-cess-credits-in-gst-2-0","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/2500k-loss-risk-from-compensation-cess-credits-in-gst-2-0\/","title":{"rendered":"2500 Cr Loss Risk from Compensation Cess Credits in GST 2.0"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d73d6db4a8b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d73d6db4a8b\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/2500k-loss-risk-from-compensation-cess-credits-in-gst-2-0\/#FADA_Rs_2500_Cr_Loss_Risk_from_Compensation_Cess_Credits_in_GST_20_Transition\" title=\"FADA : Rs. 2,500 Cr Loss Risk from Compensation Cess Credits in GST 2.0 Transition\">FADA : Rs. 2,500 Cr Loss Risk from Compensation Cess Credits in GST 2.0 Transition<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/2500k-loss-risk-from-compensation-cess-credits-in-gst-2-0\/#Key_Highlights_of_GST_20_for_Auto_Sector\" title=\"Key Highlights of GST 2.0 for Auto Sector\">Key Highlights of GST 2.0 for Auto Sector<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/2500k-loss-risk-from-compensation-cess-credits-in-gst-2-0\/#Tax_Shift_under_GST_20_for_Auto_Sector\" title=\"Tax Shift under GST 2.0 for Auto Sector: \">Tax Shift under GST 2.0 for Auto Sector: <\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/2500k-loss-risk-from-compensation-cess-credits-in-gst-2-0\/#Industry_Concerns_for_Auto_Sector\" title=\"Industry Concerns for Auto Sector\">Industry Concerns for Auto Sector<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/2500k-loss-risk-from-compensation-cess-credits-in-gst-2-0\/#Rate_Structure_Sectoral_Changes\" title=\"Rate Structure &amp; Sectoral Changes\">Rate Structure &amp; Sectoral Changes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/2500k-loss-risk-from-compensation-cess-credits-in-gst-2-0\/#Update_on_MRP_Compliance_Post_GST_Rate_Restructuring\" title=\"Update on MRP Compliance Post GST Rate Restructuring\">Update on MRP Compliance Post GST Rate Restructuring<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/2500k-loss-risk-from-compensation-cess-credits-in-gst-2-0\/#Conclusion\" title=\"Conclusion \">Conclusion <\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-29814\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/diwali-gift.jpeg\" alt=\"Next-Gen GST Reform system\" width=\"1026\" height=\"1184\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/diwali-gift.jpeg 1026w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/diwali-gift-260x300.jpeg 260w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/diwali-gift-887x1024.jpeg 887w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/diwali-gift-768x886.jpeg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/diwali-gift-800x923.jpeg 800w\" sizes=\"(max-width: 1026px) 100vw, 1026px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"FADA_Rs_2500_Cr_Loss_Risk_from_Compensation_Cess_Credits_in_GST_20_Transition\"><\/span><span style=\"color: #000080;\"><strong>FADA : Rs. 2,500 Cr Loss Risk from Compensation Cess Credits in GST 2.0 Transition<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Federation of Automobile Dealers Associations has sounded the alarm over a potential INR 2,500 crore loss to auto dealers due to the impending removal of compensation cess without clear transitional guidelines.<\/p>\n<p>These credits, currently lying in dealers\u2019 books, are tied to taxes already paid on vehicles in inventory \u2014 particularly high-tax categories like SUVs and premium cars. With GST 2.0 set to roll out from September 22, 2025, dealers fear these credits may become unusable, creating a heavy financial burden just ahead of the festive season.<\/p>\n<p>The Federation of Automobile Dealers Associations has welcomed the reforms for making vehicles more affordable and boosting demand but insists on \u201cglitch-free implementation\u201d so that the benefits of tax reduction seamlessly reach customers while protecting dealer interests.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Key_Highlights_of_GST_20_for_Auto_Sector\"><\/span><span style=\"color: #000080;\"><strong>Key Highlights of GST 2.0 for Auto Sector<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Previously, premium vehicles attracted 28% GST + 17\u201322% cess, totalling 45\u201350%. With GST 2.0, the cess is abolished, and GST is set at 40%. While this simplifies taxation and lowers rates for most segments, it leaves no mechanism to utilise existing cess credits, which may lapse unused. The following are key highlight of the change\u00a0in GST 2.0 for Auto Sector are mention below :<\/p>\n<ol>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Tax_Shift_under_GST_20_for_Auto_Sector\"><\/span><span style=\"color: #000080;\"><strong>Tax Shift under GST 2.0 <\/strong><strong>for Auto Sector<\/strong><strong>: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Rate Changes: GST reduced from 28% to 18% on automobiles. Compensation Cess completely eliminated. New GST slab structure: 5%, 18%, and 40% (12% &amp; 28% removed).<\/li>\n<li>Reduced to 18% GST: Small cars (Petrol\/LPG\/CNG \u22641200 cc, \u22644000 mm; Diesel \u22641500 cc, \u22644000 mm), Motorcycles \u2264350 cc, Three-wheelers, commercial vehicles (buses, trucks, ambulances), All auto parts,<\/li>\n<li>Reduced to 5% GST: Tractors, tractor tyres, and tractor parts &amp; Electric vehicles (unchanged at 5%)<\/li>\n<li>Raised to 40% GST: Mid-size &amp; large cars (engines &gt;1500 cc or length &gt;4000 mm, SUVs, MUVs, MPVs, XUVs with \u2265170 mm ground clearance), Motorcycles &gt;350 cc &amp; Luxury vehicles (helicopters, yachts, etc.)<\/li>\n<li>Petrol, CNG, LPG cars up to 1200 cc engine &amp; 4000 mm length \u2192 now taxed at 18% (down from 28%). &amp; Diesel cars up to 1500 cc engine &amp; 4000 mm length \u2192 now taxed at 18% (down from 28%).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ol start=\"2\">\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Industry_Concerns_for_Auto_Sector\"><\/span><span style=\"color: #000080;\"><strong>Industry Concerns for Auto Sector<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Dealers reportedly hold about 55 days\u2019 worth of vehicle inventory (per FADA\u2019s August 23 advisory).<\/li>\n<li>FADA President CS Vigneshwar stressed: \u201cOne area that needs earliest clarification is about levy and treatment of cess balances currently lying in dealers\u2019 books, so that there is no ambiguity during transition.\u201d<\/li>\n<li>Speaking to CNBC-TV18, Vigneshwar confirmed that The Federation of Automobile Dealers Associations will make a representation to the government to seek clarity and relief for dealers.<\/li>\n<li>Impact on Cess Credits: Earlier, dealers used Compensation Cess credits to offset their cess liabilities. After 22 September 2025, since cess is abolished, these credits will become non-usable. This leaves dealers holding accumulated cess balances that are effectively wasted.<\/li>\n<li>Federation of Automobile Dealers Associations (FADA) estimates that dealers will suffer a INR 2,500 crore loss due to unutilizable cess credits.<\/li>\n<li>Dealers stocked inventory for the festive season, paying cess on purchases. Now, they cannot offset it against future sales because cess no longer exists. They are urging the government to create a transition mechanism to prevent this loss.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Other Highlights<\/strong>\n<ul>\n<li data-start=\"202\" data-end=\"278\">\n<p data-start=\"204\" data-end=\"278\">From 22 Sept 2025, GST will have only 3 rates: 5%, 18%, 40%., Compensation Cess withdrawn, except for tobacco &amp; sin goods until cess dues cleared.\u00a012% and 28% slabs scrapped.<\/p>\n<\/li>\n<li data-start=\"408\" data-end=\"464\">\n<p data-start=\"410\" data-end=\"464\">Time of supply rules apply to advances &amp; supply.\u00a0ITC allowed on goods\/services received till 21 Sept 2025.<\/p>\n<\/li>\n<li data-start=\"535\" data-end=\"610\">\n<p data-start=\"537\" data-end=\"610\">Refunds for inverted duty structure continue as per existing rules.\u00a0NIL rate \u2260 exemption \u2192 no GST but not exempt supplies.<\/p>\n<\/li>\n<li data-start=\"2227\" data-end=\"2317\">\n<p data-start=\"2229\" data-end=\"2317\">Items taxable till 21 Sept but exempt after \u2192 proportionate ITC reversal required.\u00a0Sin goods (tobacco, pan masala, etc.) \u2192 continue under old structure till cess dues cleared.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3 data-start=\"617\" data-end=\"659\"><span class=\"ez-toc-section\" id=\"Rate_Structure_Sectoral_Changes\"><\/span><span style=\"color: #000080;\">Rate Structure &amp; Sectoral Changes<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"padding-left: 40px;\" data-start=\"661\" data-end=\"697\"><span style=\"color: #000080;\"><strong data-start=\"665\" data-end=\"695\">Daily-Use &amp; Consumer Goods<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul data-start=\"698\" data-end=\"958\">\n<li data-start=\"698\" data-end=\"769\">\n<p data-start=\"700\" data-end=\"769\">Hair oil, shampoo, toothpaste, soaps, shaving creams \u2192 18% \u2192 5%<\/p>\n<\/li>\n<li data-start=\"770\" data-end=\"824\">\n<p data-start=\"772\" data-end=\"824\">Butter, ghee, cheese, dairy spreads \u2192 12% \u2192 5%<\/p>\n<\/li>\n<li data-start=\"825\" data-end=\"879\">\n<p data-start=\"827\" data-end=\"879\">Packaged namkeens, bhujia, mixtures \u2192 12% \u2192 5%<\/p>\n<\/li>\n<li data-start=\"880\" data-end=\"958\">\n<p data-start=\"882\" data-end=\"958\">Utensils, sewing machines &amp; parts, diapers, feeding bottles \u2192 12% \u2192 5%<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\" data-start=\"960\" data-end=\"980\"><span style=\"color: #000080;\"><strong data-start=\"964\" data-end=\"978\">Healthcare<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul data-start=\"981\" data-end=\"1143\">\n<li data-start=\"981\" data-end=\"1024\">\n<p data-start=\"983\" data-end=\"1024\">Health &amp; Life Insurance \u2192 18% \u2192 Nil<\/p>\n<\/li>\n<li data-start=\"1025\" data-end=\"1056\">\n<p data-start=\"1027\" data-end=\"1056\">Thermometers \u2192 18% \u2192 5%<\/p>\n<\/li>\n<li data-start=\"1057\" data-end=\"1143\">\n<p data-start=\"1059\" data-end=\"1143\">Medical oxygen, diagnostic kits, glucometers, corrective spectacles \u2192 12% \u2192 5%<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\" data-start=\"1145\" data-end=\"1164\"><span style=\"color: #000080;\"><strong data-start=\"1149\" data-end=\"1162\">Education<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul data-start=\"1165\" data-end=\"1337\">\n<li data-start=\"1165\" data-end=\"1205\">\n<p data-start=\"1167\" data-end=\"1205\">Maps, charts, globes \u2192 12% \u2192 Nil<\/p>\n<\/li>\n<li data-start=\"1206\" data-end=\"1263\">\n<p data-start=\"1208\" data-end=\"1263\">Pencils, sharpeners, crayons, pastels \u2192 12% \u2192 Nil<\/p>\n<\/li>\n<li data-start=\"1264\" data-end=\"1310\">\n<p data-start=\"1266\" data-end=\"1310\">Notebooks &amp; exercise books \u2192 12% \u2192 Nil<\/p>\n<\/li>\n<li data-start=\"1311\" data-end=\"1337\">\n<p data-start=\"1313\" data-end=\"1337\">Erasers \u2192 5% \u2192 Nil<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\" data-start=\"1339\" data-end=\"1370\"><span style=\"color: #000080;\"><strong data-start=\"1343\" data-end=\"1368\">Agriculture &amp; Farmers<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul data-start=\"1371\" data-end=\"1598\">\n<li data-start=\"1371\" data-end=\"1411\">\n<p data-start=\"1373\" data-end=\"1411\">Tractor tyres &amp; parts \u2192 18% \u2192 5%<\/p>\n<\/li>\n<li data-start=\"1412\" data-end=\"1439\">\n<p data-start=\"1414\" data-end=\"1439\">Tractors \u2192 12% \u2192 5%<\/p>\n<\/li>\n<li data-start=\"1440\" data-end=\"1519\">\n<p data-start=\"1442\" data-end=\"1519\">Bio-pesticides, micro-nutrients, drip irrigation, sprinklers \u2192 12% \u2192 5%<\/p>\n<\/li>\n<li data-start=\"1520\" data-end=\"1598\">\n<p data-start=\"1522\" data-end=\"1598\">Agricultural machinery (soil prep, cultivation, harvesting) \u2192 12% \u2192 5%<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\" data-start=\"1600\" data-end=\"1621\"><span style=\"color: #000080;\"><strong data-start=\"1604\" data-end=\"1619\">Automobiles<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul data-start=\"1622\" data-end=\"1886\">\n<li data-start=\"1622\" data-end=\"1679\">\n<p data-start=\"1624\" data-end=\"1679\">Petrol\/LPG\/CNG cars (\u22641200cc &amp; 400mm) \u2192 28% \u2192 18%<\/p>\n<\/li>\n<li data-start=\"1680\" data-end=\"1729\">\n<p data-start=\"1682\" data-end=\"1729\">Diesel cars (\u22641500cc &amp; 400mm) \u2192 28% \u2192 18%<\/p>\n<\/li>\n<li data-start=\"1730\" data-end=\"1764\">\n<p data-start=\"1732\" data-end=\"1764\">Three-wheelers \u2192 28% \u2192 18%<\/p>\n<\/li>\n<li data-start=\"1765\" data-end=\"1803\">\n<p data-start=\"1767\" data-end=\"1803\">Motorcycles \u2264350cc \u2192 28% \u2192 18%<\/p>\n<\/li>\n<li data-start=\"1804\" data-end=\"1848\">\n<p data-start=\"1806\" data-end=\"1848\">Goods transport vehicles \u2192 28% \u2192 18%<\/p>\n<\/li>\n<li data-start=\"1849\" data-end=\"1886\">\n<p data-start=\"1851\" data-end=\"1886\">Luxury &amp; large vehicles \u2192 40%<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\" data-start=\"1888\" data-end=\"1909\"><span style=\"color: #000080;\"><strong data-start=\"1892\" data-end=\"1907\">Electronics<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul data-start=\"1910\" data-end=\"2045\">\n<li data-start=\"1910\" data-end=\"1946\">\n<p data-start=\"1912\" data-end=\"1946\">Air conditioners \u2192 28% \u2192 18%<\/p>\n<\/li>\n<li data-start=\"1947\" data-end=\"2013\">\n<p data-start=\"1949\" data-end=\"2013\">TVs (above 32&#8243;), LED\/LCD, monitors, projectors \u2192 28% \u2192 18%<\/p>\n<\/li>\n<li data-start=\"2014\" data-end=\"2045\">\n<p data-start=\"2016\" data-end=\"2045\">Dishwashers \u2192 28% \u2192 18%<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\" data-start=\"2047\" data-end=\"2068\"><span style=\"color: #000080;\"><strong data-start=\"2051\" data-end=\"2066\">Hospitality<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul data-start=\"2069\" data-end=\"2130\">\n<li data-start=\"2069\" data-end=\"2130\">\n<p data-start=\"2071\" data-end=\"2130\"><span style=\"color: #000080;\">Hotel rooms up to \u20b97500\/night \u2192 5% (No ITC available)<\/span><\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3 data-start=\"92\" data-end=\"153\"><span class=\"ez-toc-section\" id=\"Update_on_MRP_Compliance_Post_GST_Rate_Restructuring\"><\/span><span style=\"color: #000080;\"><strong data-start=\"95\" data-end=\"151\">Update on MRP Compliance Post GST Rate Restructuring<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"253\" data-end=\"471\">In line with the GST rate changes announced at the 56th GST Council meeting, the Ministry of Consumer Affairs has clarified compliance obligations under the Legal Metrology (Packaged Commodities) Rules, 2011: Businesses can clear pre-GST-change inventory by correcting MRP transparently, but must strictly follow the permitted methods, keep the old MRP visible, and fulfil consumer awareness and reporting obligations. (Circular dated 9 September 2025 \u2013 Department of Consumer Affairs, Weights &amp; Measures Unit) . following are\u00a0<span style=\"color: #000080;\"><strong data-start=\"477\" data-end=\"495\">Key Provisions-\u00a0<\/strong><strong data-start=\"95\" data-end=\"151\">Update on MRP Compliance Post GST Rate Restructuring :\u00a0<\/strong><\/span><\/p>\n<ul data-start=\"498\" data-end=\"1547\">\n<li data-start=\"498\" data-end=\"753\">\n<p data-start=\"501\" data-end=\"530\">Revised MRP Declaration\u00a0 : Manufacturers, packers, and importers may revise MRPs on unsold stock manufactured, packed, or imported before the GST change. Valid until 31 December 2025 or till old stock is sold, whichever is earlier.<\/p>\n<\/li>\n<li data-start=\"755\" data-end=\"961\">\n<p data-start=\"758\" data-end=\"780\">Mode of Revision : Only stamping, affixing stickers, or online printing may be used to show revised MRP.The original MRP must remain visible and cannot be overwritten\/obscured.<\/p>\n<\/li>\n<li data-start=\"963\" data-end=\"1119\">\n<p data-start=\"966\" data-end=\"994\">Consumer Communication : At least two newspaper announcements (in one or more papers) must be made to inform consumers about revised MRPs.<\/p>\n<\/li>\n<li data-start=\"1121\" data-end=\"1350\">\n<p data-start=\"1124\" data-end=\"1150\">Regulatory Reporting :\u00a0Entities must notify Dealers in the supply chain, Director of Legal Metrology (Central Government) &amp; Controllers of Legal Metrology in respective States\/UTs.<\/p>\n<\/li>\n<li data-start=\"1352\" data-end=\"1547\">\n<p data-start=\"1355\" data-end=\"1379\">Packaging Material : Existing packaging\/wrappers with old MRP may continue till 31 December 2025, subject to corrections being made (via stamping, stickers, or online printing).<\/p>\n<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-29944\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/GSTR-rate-.png\" alt=\"GSTR rate\" width=\"935\" height=\"895\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/GSTR-rate-.png 567w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/GSTR-rate--300x287.png 300w\" sizes=\"(max-width: 935px) 100vw, 935px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><span style=\"color: #000080;\"><strong>Conclusion <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The GST Council\u2019s reforms are meant to simplify taxation and reduce rates for consumers, but the transition gap (unused cess credits) is creating a heavy INR 2,500 crore burden on auto dealers. Unless the government introduces a credit transfer\/refund mechanism, this loss will directly impact dealer margins during the festive sales season.<\/p>\n<p>While GST 2.0 simplifies the tax structure and lowers rates for most vehicles, the government\u2019s refusal to refund or adjust cess already paid creates a INR 2,500 crore hit for auto dealers. government will not offer any relief, and the matter may have to be resolved between manufacturers and dealers. The lack of a transition mechanism shifts the burden squarely onto the dealer network, potentially straining OEM\u2013dealer relations.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-29867\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/WhatsApp-Image-2025-09-07-at-14.05.02.jpeg\" alt=\"gst rate \" width=\"1022\" height=\"1280\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/WhatsApp-Image-2025-09-07-at-14.05.02.jpeg 1022w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/WhatsApp-Image-2025-09-07-at-14.05.02-240x300.jpeg 240w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/WhatsApp-Image-2025-09-07-at-14.05.02-818x1024.jpeg 818w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/WhatsApp-Image-2025-09-07-at-14.05.02-768x962.jpeg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/09\/WhatsApp-Image-2025-09-07-at-14.05.02-800x1002.jpeg 800w\" sizes=\"(max-width: 1022px) 100vw, 1022px\" \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>FADA : Rs. 2,500 Cr Loss Risk from Compensation Cess Credits in GST 2.0 Transition The Federation of Automobile Dealers Associations has sounded the alarm over a potential INR 2,500 crore loss to auto dealers due to the impending removal of compensation cess without clear transitional guidelines. These credits, currently lying in dealers\u2019 books, are &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[172],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29863"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=29863"}],"version-history":[{"count":4,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29863\/revisions"}],"predecessor-version":[{"id":29945,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29863\/revisions\/29945"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=29863"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=29863"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=29863"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}