Supreme Court Revokes The Delhi Diesel Ban

The eight month-old Delhi diesel ban, which has created a lot of unrest among several car manufacturers, has finally being lifted. As known, the ban barred all vehicles that used diesel engines of more than 2000cc capacity from being registered in the Delhi-NCR. In exchange for the lifting of the ban, the apex court has established a 1 per cent environmental protection cess (green cess) on such vehicles’ ex-showroom price, applicable only in Delhi and its satellite cities.

The collected ‘green cess’ will go into a separate account in a PSU bank, which will fall under the control of the Central Pollution Control Board. Along with this, the court also stated that it will consider a similar cess on vehicles using diesel engines less than 2000cc. Weird, isn't it?

The ban has severely affected the sales of manufacturers who use diesel engines of more than 2000cc capacity. Toyota and Mercedes-Benz are among the most adversely affected manufacturers, with the former even suspending its future investment in the country. To get around the ban, a slew of manufacturers introduced petrol versions of their cars, like Mercedes, Jaguar, BMW, etc. Mahindra even launched the Scorpio and the XUV500 with a 1.99-litre diesel motor in Delhi-NCR.

The new decision certainly comes in as a sigh of relief for the affected manufacturers. Mahindra commented on the ban’s lift, “We are very relieved with the decision of the Honourable 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”.

Audi India expressed its thoughts on the decision, as its head, Joe King, said, "We welcome the decision of honourable Supreme Court. It is pleasing to get clarity, particularly for the customers. The lack of clarity has already had a severe negative impact with the worst affected being people working at dealerships. There have already been job losses due to the impact this ban has had on business in the Delhi NCR. Short-term decisions lead to increased uncertainty for the future. It creates a lot of confusion for the market in general. What we really need is a long-term roadmap. We need clarity on policy direction and time to amend our strategy in line with the customer demand. It is, however, pleasing to see this welcome step and hope that this will lead to some stability for business in the Delhi NCR.”

However, the 1 per cent cess is said to be only a temporary fix and the tax could be modified in the course of time. Meaning, it could either be increased or could even be completely removed, which was suggested by the central government, earlier.