FADA Approaches Supreme Court Seeking Protection Over Rs. 2,500 Crore Cess Credits Lapse Amid GST 2.0 Transition:

The Federation of Automobile Dealers Association (FADA) has approached the Supreme Court seeking relief over the lapse of Rs. 2,500 crore compensation cess credits under the new GST 2.0 framework.

FADA Fights Cess Credit Lapse Impacting MSME Dealers

Saloni Kumari

Oct 29, 2025

Last update on Oct 29, 2025

FADA Approaches Supreme Court Seeking Protection Over Rs. 2,500 Crore Cess Credits Lapse Amid GST 2.0 Transition The Federation of Automobile Dealers Association (FADA) and seven other automobile dealers have recently approached the Supreme Court of India seeking relief over Rs 2,500 crore worth of compensation cess credit lapse. The writ petition dated October 17, 2025, with Diary number 60671/2025, has been filed by companies named Federation of Automobile Dealers Association, M/S Akshara Motors Private Limited, M/S Dhoot Auto Private Limited, M/S Balaji Auto Works Private Limited, M/S Magnus Motors Private Limited, M/S Saisum Motors Private Limited, United Automobiles and Palconn Automobiles LLP (petitioners) against the Union of India, Central Board of Indirect Taxes and Customs (CBIC) and Goods and Services Tax Council (respondents). The move is aimed towards ensuring fairness for thousands of MSMEs (Micro, Small, and Medium Enterprises) auto dealers. In a statement, the Federation of Automobile Dealers Association (FADA) said on Friday, "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. FADA has moved the Supreme Court not against reform, but for fairness and trust. Reforms should empower, not erase what’s earned." On September 3, after the 56th GST Council meeting, FADA appreciated the move of the government to introduce GST 2.0 reforms, calling it a major milestone for India’s automobile retail industry. However, it also asked the government to clearly explain how the cess balance will be handled to avoid confusion during the changeover.

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Saloni Kumari

Content Writer

Saloni is a Content Writer with 2+ years of experience at studycafe.in. She writes legal, taxation, and finance related content including GST, Income Tax etc. Skilled in translating complex judicial pronouncements and regulatory developments into clear, and reader-friendly articles. Experienced in covering judgements of ITAT, High Court, GSTAT, and news related to Income Tax, GST, and corporate law. She can be reached at [email protected].