Compliance KPIs for Vehicle Showrooms

An automobile showroom is the only retail business where the Income Tax Department, the GST Department and the RTO all see the same transaction. The vehicle gets a chassis number, an engine number, an invoice, an e-way bill, an RTO registration and a TCS certificate, all linked. There is no room for an off-the-books sale. Compliance therefore runs at the level of each VIN sold.

The two compliance sections that hit dealers hardest are 206C(1F) — 1% TCS on every vehicle sold above Rs 10 lakh — and SFT-005, which puts every cash receipt of Rs 2 lakh and above straight into the customer's AIS. Get either wrong and you fail two compliance ratings.

1. Income Tax KPIs

The Income Tax Act 1961 — and the new Income Tax Act 2025 effective 1 April 2026 — keep the same pillars: pay advance tax on time, file an accurate return, and stay clean on cash. The KPIs below are the ones an audit officer pulls up first if your file lands on a scrutiny desk.

KPI / Compliance Item	Threshold & Action	Due Date	Source
Tax audit u/s 44AB	Mandatory once turnover crosses Rs 1 crore. Most car dealers cross this with 5–10 vehicles. 44AD usually unavailable because turnover is above Rs 3 crore.	30 Sep 2027	Sec 44AB
Advance tax	15 / 45 / 75 / 100 percent of liability by the four instalment dates. Year-end model-clearance margins distort Q4 estimates, so re-run the projection in early March.	Quarterly	Sec 208–211
Cash receipt cap (269ST)	You cannot receive more than Rs 2 lakh in cash for a single vehicle, even if split as booking plus balance. The single-transaction test applies.	Continuous	Sec 269ST
SFT-005 reporting	Every cash receipt of Rs 2 lakh or more per transaction must be reported in Form 61A by 31 May following the FY.	31 May 2027	Rule 114E / Sec 285BA
ITR filing	ITR-5 for firms and LLPs, ITR-6 for companies — most dealerships are firms or companies.	31 Oct 2027	Sec 139(1)

2. TDS KPIs

TDS payments are due by the 7th of the next month (March is 30 April), and quarterly Form 26Q or 27EQ returns drive Form 16 / 16A on TRACES. Late filing of the return alone costs Rs 200 per day under Sec 234E.

KPI / Compliance Item	Threshold & Action	Due Date	Source
206C(1F) — Sale of motor vehicle	1% TCS on every motor vehicle sold above Rs 10 lakh, regardless of buyer turnover or mode of payment.	7th of next month	Sec 206C(1F)
194Q — Purchase from OEM	0.1% on purchases above Rs 50 lakh from a single OEM if your turnover crossed Rs 10 crore last FY (most dealers qualify).	7th of next month	Sec 194Q
206C(1H) — TCS on parts and accessories	0.1% on sale above Rs 50 lakh from one buyer (e.g. fleet customer). Excluded if 194Q applies.	7th of next month	Sec 206C(1H)
194D / 194DA — Insurance commission and payouts	5% on insurance commission earned by the dealer on tie-up policies.	7th of next month	Sec 194D
194I — Showroom premises rent	10% on rent above Rs 2.4 lakh in the FY.	7th of next month	Sec 194I
Quarterly returns (Form 26Q + 27EQ)	TCS reconciliation with the buyer's PAN is essential — wrong PAN = TCS does not appear in their 26AS.	31 Jul, 31 Oct, 31 Jan, 31 May	Rule 31A / 31AA

3. GST KPIs

GST is the most data-rich compliance regime — every invoice you raise and every invoice you receive sits on the network. Use GSTR-2B, not 2A, as your reconciliation base from FY 2022-23 onwards.

KPI / Compliance Item	Threshold & Action	Due Date	Source
GST rate on motor vehicles	28% plus compensation cess of 1% to 22% based on engine capacity, length, fuel type and EV exemption.	Continuous	Notification 1/2017-CT(R), Compensation Cess Act
GST on used vehicle / exchange	Margin scheme: tax on (sale price minus purchase price), zero if margin is negative.	Continuous	Notification 8/2018-CT(R)
Demo car ITC	ITC is not blocked under Sec 17(5)(a) only if the demo car is used for further supply (test drives by salesman). Strict end-use evidence is needed.	Continuous	Sec 17(5) read with CBIC Circular 231/2024
E-invoicing	Every car dealer crosses Rs 5 crore. Dealer-OEM B2B invoices must carry IRN and QR.	Every invoice	Rule 48(4)
E-way bill	On every vehicle dispatched (showroom to customer or yard to showroom).	Before movement	Rule 138
GSTR-1 and 3B	Monthly only, since most dealers are above QRMP eligibility.	11th and 20th	Sec 37 / 39
GSTR-9 / 9C	Annual return and reconciliation.	31 Dec 2027	Sec 44

4. Profession tax (Maharashtra)

Profession Tax is a state levy run by the Maharashtra Goods & Services Tax Department. There are two registrations and most businesses need both — one for the owner, one for the staff.

Registration	Who needs it / what you pay	Due date	Source
PTEC (Enrolment)	For the proprietor, partner, director, LLP or company. Flat Rs 2,500 per year for most non-salaried professions and businesses.	30 June	MahaGST PT Act 1975
PTRC (Registration)	For employers paying salary above Rs 7,500 p.m. (male) or Rs 25,000 p.m. (female). Slabs: Rs 175 p.m. for Rs 7,501–10,000 (male); Rs 200 p.m. plus Rs 300 in February if salary exceeds Rs 10,000. Annual ceiling Rs 2,500 per employee.	Last day of the next month	MahaGST PT Rules

5. Bookkeeping and the filing system

Section 44AA of the Income Tax Act and Section 35 (read with Rule 56) of the CGST Act set the bookkeeping baseline. For most non-professional businesses, books are required if income is above Rs 2.5 lakh or turnover above Rs 25 lakh in any of the three preceding years.

Minimum books to keep

• Cash book, bank book, journal and ledger — daily, on accrual basis (Sec 145 read with ICDS).
• Sales register and purchase register — invoice-wise, with HSN/SAC and GST.
• Stock register — opening, receipts, issues, closing. Mandatory under CGST Rule 56(2).
• Bills, vouchers, e-way bills and delivery challans behind every entry.
• Fixed asset register, block-wise, with the date the asset was put to use.
• TDS / TCS certificates downloaded from TRACES.
• VIN-wise stock register: chassis, engine, model, colour, OEM invoice date, purchase price, sale date, buyer PAN, sale price, TCS deducted, RTO registration date.
• Form 61A working file: every cash receipt of Rs 2 lakh or more with PAN, mode of payment and transaction value.
• Demo car logbook: daily kilometre reading, salesman name, customer name, test-drive duration.
• Insurance and finance commission ledger, TPA-wise and financier-wise.

How long to keep them

• Income Tax: 6 years from the end of the relevant Assessment Year (Sec 149). For reopened or search cases, up to 10 years.
• GST: 72 months from the due date of the annual return for the year (CGST Sec 36).
• Companies and LLPs: 8 financial years (Sec 128 Companies Act 2013 / corresponding LLP rules).

6. Sector-specific compliance traps

The four mistakes our team sees most often when we take over books from another firm:

7. Annual compliance calendar (FY 2026-27)

Month	Compliance milestones
April	TDS payment for March (30 Apr); GSTR-1 / 3B for March; PT employee deduction.
May	Q4 TDS return Form 26Q (31 May); Form 16A; SFT-005 / 61A (31 May).
June	Form 16 to employees (15 Jun); Q1 advance tax (15 Jun); PTEC payment (30 Jun).
July	Q1 TDS return (31 Jul); ITR for non-audit cases (31 Jul); QRMP option last month.
August	Routine GSTR-1 / 3B; e-invoice review.
September	Tax audit report u/s 44AB (30 Sep); Form 10B / 10BB (30 Sep) for trusts; Q2 advance tax (15 Sep).
October	Q2 TDS return (31 Oct); ITR for audit cases (31 Oct); GSTR-9 prep starts.
November	ITR for transfer-pricing cases (30 Nov).
December	Q3 advance tax (15 Dec); GSTR-9 / 9C filing (31 Dec).
January	Q3 TDS return (31 Jan); books reconciliation for FY closing.
February	Stock-take preparation; PT special slab (Rs 300 in Feb).
March	Q4 advance tax (15 Mar); Annexure V for GTAs (31 Mar); books closure; year-end TDS.