FADA President's Message March 2004 Deshnidhi Kasliwal Political instability associated with political turmoil in the last ten years or so has taught us how to live with it. No wonder then, it is a business as usual even after the dates for the Lok Sabha elections have been announced. There is neither an air of excitement nor a feeling of unease among the people and the industry alike. It is a reflection of resilient India totally unmindful of the election outcome, as exhibited by the continuing economic growth and the increasing tempo of investments. The idea of a coalition government in the country has come to be accepted. Therefore, there is no gainsaying that the economic reforms and restructuring programme will go on irrespective of the party that comes to power after elections. Partly, because, barring the leftists, most political parties subscribe to the agenda of liberalisation and globalisation; and secondly, no government can afford to ignore public pressure - a healthy phenomenon in the Indian context. While current mood is upbeat from industry's point of view, we have unfinished agenda of kick-starting the second-generation reforms, particularly in the area of labour laws. Hope, with the installation of the new Government shortly, the issues of common concern will be taken up with all earnestness and the reforms process will get a big push. Friends, service tax is relatively a new area for automobile dealers to contend with. In the scenario of shrinking margins, a tax of this form is going to further erode our profits. There are host of issues arising out of service tax, which are of concern to Automobile Dealers. Some of the dealers may even not be acquainted fully with the provisions of service tax. One example is that service tax paid on input services, like, telephone bills can be set off against service tax payable on repair and service of motor vehicles. FADA has therefore decided to organize a series of seminars on the subject across the country to educate its members on the provisions, intricacies and implications of service tax law. Concerned authorities in the Government and legal experts will be invited to share their expertise with us at these seminars. The issues emerging out of these interactions will be appropriately taken up by FADA. We would be happy to have your suggestions and points to be taken up for discussion at these seminars. Another issue of concern to automobile dealers is high rates of taxes and cascading effect of taxes on motor vehicles at various stages, making the motor vehicles beyond the reach of common people. High incidence of and variation in road tax, particularly the life time road tax, apart from adding to price tag of vehicles, create uneven field for automobile dealers located at various places resulting in undue diversion of trade from one place to another. Non-Uniformity in registration procedures from State to State is another area bugging automobile dealers. All these issues were highlighted at the Inaugural Session of Auto Summit 2004 in which Hon'ble Minister of Road Transport & Highways was present. He agreed to consider specific suggestions in this regard from FADA. The matter is being followed up with the Hon'ble Minister and his Ministry officials. Excess/dead inventory wherein significant capital of automobile dealers is locked is another issue, which is high on the agenda of FADA. As you would have noticed in the last issue of FADA Journal, we have started an online Excess Inventory Exchange Programme in B2B section of FADA's website: fadaweb.com. Details of this programme are published again elsewhere in this issue. A minimal fee is being charged for registration. I would urge upon the members to make use of this facility to unlock their dead and excess inventories. I also take this opportunity to invite members to be actively associated with the initiatives of FADA and offer their critical comments to enable us further improve our services and FADA's usefulness to its members. With best wishes, Yours sincerely Deshnidhi Kasliwal President