Supreme Court Revoked Delhi Diesel Ban; Imposes 1% Green Cess as Compensation

In December 2015, the Supreme Court has banned the sale of large diesel cars, mainly SUVs with an engine capacity larger than 2,000cc. The ban was implanted to control the capital’s drastic pollution situation. This decision severely impacted the sales of manufacturers and dealers with thousands of unsold cars, within the eight month long durations till temporary ban implied.

But today, the Supreme Court has revoked ban by saying, “a green fine will have to be paid by manufacturers or dealers to compensate for polluting the city's air. The tax - 1% of the ex-showroom or retail price - must be deposited in a designated state-run bank.” Just after this decision government has accelerate the process to adopt the more stricter emission norms similar to the Euro VI in Western Europe.

The ban lifted off on the basis of appeal made by various high profile national and international automaker like Mercedes-Benz, Mahindra & Mahindra and Toyota Kirloskar Motor. Toyota referred diesel ban as “ a corporate death sentence.”

Dr. Pawan Goenka, President of Mahindra's Automotive Business said after the Supreme Court decision, "We are very relieved with the decision of the Supreme Court today. Hope this decision will put all controversy surrounding diesel fuel behind us and we will be able to focus on the more important task of making our vehicles compliant with BS 6 norms by April 2020".

"We are ready to go with global technology, meet global standards of emissions levels, It is best to adopt global levels and stick with that, and not keep changing policy," said Vikram Kirloskar of Toyota to NDTV. Maruti Suzuki Chairman RC Bhargava added, "I think we still have to see what impact this has on the sentiments of people towards diesel cars. I would suspect that the sentiments will come back in favour of diesel cars as it was earlier. And if the people are convinced that this has happened on a long term basis, then I think we will be back to doing business as usual."

Rakesh Srivastava, Sr. VP Sales & Marketing, Hyundai Motor India Ltd. says - "It is a positive step towards addressing the challenges of customers and various stakeholders. To improve investment climate positively is most important, supported by a structured and long road map for introduction of technology with a positive tax regime in which implementation of GST will play a key role."

Also, the government has questioned the Court's for introducing new green cess citing that only the Parliament can approve a new tax. The top court has said that this new imposed cess will be consider to enhance at a later stage and the similar can be implied on petrol vehicles as well.


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