Automobile retailers to draw more credits post new GST notification

On Friday, the Indian government informed about another credit use process that may give a onetime advantage to automobile sellers and retailers by improving their liquidity in terms of monetary and business.


In the notice, the government tells about the new rule, that is 88A that says that the contribution of IGST must be first utilized against the final result of IGST as in following by set-off of IGST against either CGST or SGST according to the automobile dealer’s requests.

Cartechnewz is sneaking inside the government’s new notification and observing the newly implemented rule.

Following the notification, Vinkesh Gulati, Vice-President, FADA in discussion with the GST Commissionerate, stated that automobile dealers would not need to make cash payments if they have inputs. It would be an alleviation for sellers as the sum for working capital because of inventories, will never again be stress.


Understandably, this is an update after the notification of February 1, which expressed that IGST must be balanced first and CGST and SGST later.

And, with the new notice from the Indian government, IGST credit can be used first. It’s told, and soon it will be in work on the GST spread network.

Input tax credit because of incorporated expense will initially be used towards payments of coordinated duty, and the remaining amount, assuming any, might be used towards the payment of central and state or union tax, all things considered, in any request. These wordings are from the official read of the Indian government notification.

Indeed, this notification may help the Indian automobile dealers’ business that was suffering losses since September because of high inventory backlogging.


In any case, the automobile industry dealer’s association is feeling a breath of relief now as the new guideline will give a lift to their assessments. And, thus, helping them incidentally from the web of limited income flow.

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