In a major relief to the automobile industry, the Supreme Court on Friday lifted the restriction on registration of diesel cars and SUVs having engine capacity of 2000cc and above in Delhi and National Capital Region (NCR) on payment of one per cent of the ex-showroom price of such vehicles as green cess.
The cess, charged as environment protection charge, has to be paid by the vehicle manufacturer with Central Pollution Control Board (CPCB) which will open a separate account with a scheduled public sector bank.
The SC said that the registration of the vehicle would be done by the Regional Transport Officer on the satisfaction that 1 per cent of the cost of the vehicle has been deposited with the CPCB by the vehicle manufacturers/dealer/sub-dealer. However, a Bench headed by Chief Justice TS Thakur left open for adjudication Centre’s opposition that such charge cannot be levied by the court. The SC will decide later whether green cess can be levied on diesel vehicles of below 2000cc engine capacity.
The order was welcomed by the automobile industry which said efforts must be made to address the real cause of pollution instead of targeting a particular type of fuel.
The Apex Court’s direction on modifying its December 16, 2015 order came on a plea of automobile companies Toyota and Mercedes-Benz. Appearing for Mercedes, senior advocate and former solicitor general Mohan Parasaran said the company has offered to pay 1 per cent of the ex-showroom price of these cars as green cess on being permitted to resume sales in Delhi and NCR. Toyota and Mercedes had insisted their offer to the court was voluntary in order to overcome the ban and not on the premise that their vehicles are polluting the environment.
While supporting the automobile companies’ plea for modification of the order, the Ministry of Heavy Industry and Public Enterprises had opposed imposition of green cess on buyers of big diesel cars and SUVs.
On July 4, the court had reserved its verdict on pleas seeking modification of its order banning registration of diesel-run SUVs and high-end cars with engine capacity of 2000cc and above in Delhi and NCR, indicating that such vehicles may be allowed to be registered again on payment of one per cent of ex-showroom price as green cess.
Despite the Apex Court order, Toyota insisted its stand to hold back investments in India will continue till it gets clarity on the future roadmap both from a court’s stand point and Government’s policy side. “Our vehicles meet every norm laid out in the country. We made the offer of 1 per cent green cess under duress. While we welcome the Supreme Court decision, we wish if only the Court did this earlier,” Toyota Kirloskar Motor Vice-Chairman and Director Shekar Viswanathan said.
Society of Indian Automobile Manufacturers (SIAMs) Director General Vishnu Mathur said the decision will bring certain amount of relief for those companies whose vehicles were affected by the ban. “However, they will be at a comparative disadvantage due to the 1 per cent green cess. The main concern of the automobile industry is that this issue will crop up again in October-November with the onset of winter when pollution increases. We need to look at the long term and find the real cause of pollution to address the issue. We stand by our view that cars are only a minor contributor to the overall pollution.”
Audi India Head Joe King said lack of clarity has already had a severe negative impact on the sale of vehicles and the worst-affected were those working at dealerships. “There have already been job losses due to the impact this ban has had on business in the Delhi NCR,” King said.