A Chequered Year

 

Dear friends,

I assumed the office of President of this august organisation roughly a year back. It would be appropriate for me to take stock of how the year panned out and the challenges faced by auto retail business during the year.

There is no gainsaying that it has been an eventful year marked by ups and downs. When I took over the reins of F A D A in September last year, the auto market was up on the growth curve, after the fluctuating fortunes in the previous two years, and the outlook was promising. On 8th November 2016 came the bombshell, when the Prime Minister announced the demonetisation of Rs. 1,000 and Rs. 500 notes. The demonetisation of high currency notes temporarily paralysed largely the cash dependent economy, which, in turn, severely affected the automobile market.

Responding to the dire situation prevailing at that time, F A D A, as a body of automobile dealers, promptly approached the Government, OEMs, banks and NBFCs, seeking relief and support for the automobile dealers, who were facing cash crunch due to the plunge in vehicle sales as a result of the demonetisation. It gives me sense of satisfaction that F A D A received a positive response from all quarters – Government, OEMs and financial institutions.

As the supply of new currency notes improved, the auto market started recovering slowly, but surely, from the impact of demonetisation. However, the Supreme Court’s order, unexpectedly and abruptly banning the sale of BS-III vehicles, even though manufactured on or before 31st March 2017, from 1st April 2017 dealt another blow to the auto market, which led to the distress sales of BS III vehicles by OEMs and dealers. It took 2-3 months for the commercial vehicles to come out of the slowdown blues.

Implementation of GST from 1st July 2017 is another major development that has shaken the businesses, which are struggling to come to grips with the complexities and nuances of the new tax regime. There are a number of issues and grey areas, in addition to quantum increase in tax rates in some cases, which are bothering the members of automobile dealer fraternity, as gauged from scores of queries on GST being received from my fellow dealers.

We, in F A D A, are alive to the enormity of challenge arising out of the implementation of GST. A series of seminars on GST were organised by F A D A in different parts of the country for the education and guidance of its members to ensure smooth transition to GST without any hiccups. F A D A has taken up various issues relating to GST, of concern to the automobile dealers, with the GST Council and other concerned authorities in the Government. Simultaneously, a number of measures have been taken within F A D A to help and guide the members on the implications and intricacies of GST. We have engaged GST consultants to clarify the members’ queries and tied up with GSTStreet.com for an online training course on GST for F A D A members. In addition, 30 state-wise, city-wise Whatsapp Groups have been constituted, which enables members to share their concerns and views on GST and keeps them in the loop in regard to various other developments within the auto retail business across the country.

I am happy to note that notwithstanding the GST glitches, auto market has performed reasonably well during the last two months, which is encouraging.  Needless to mention, we have successfully negotiated bumps from time to time in the past. I am sanguine that we shall rise to the occasion again and stand up to the challenge of GST.

With best wishes for the upcoming festive season,

Yours sincerely,

John K Paul

 

 

 

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