The Federation of Automobile Dealers Associations (FADA) has written to the GST Council, asking that the interest charged on automobile dealers in case of late GST payment, should be calculated on net tax liability instead of gross liability.
The association said interest charged on gross amount in an event of late payment has led to undue hardship to dealers across the country, who are already under pressure due to poor sales and high interests on loans for operational purposes.
FADA president Ashish Harsharaj Kale said many small businesses located in tier 2 and tier 3 towns face difficulties in GST compliances due to system mismatches. “We have requested that the interest provided should be calculated on net tax liability instead of gross tax liability which will help auto dealers in ease of doing business,” Kale said.
The proposal to charge interest on net of ITC value instead of gross had been already recommended by the GST Council in its 31st meeting held in December 2018. However, the same could not be passed due to Parliament dissolution for four months.
