Manufacturers will have to pay 1 per cent green cess in order to sell diesel vehicles above 2,000cc of engine capacity in Delhi-NCR, proposed the Supreme Court.
The seven-month ban on sale of big diesel vehicles in Delhi/NCR may soon be lifted. The Supreme Court has proposed the manufacturers to pay 1 per cent of the ex-showroom price of the vehicle as green cess in order to sell diesel vehicles powered by engines with 2,000cc or above capacity.
While the Supreme Court is open to lifting ban on high-end diesel vehicles, the Ministry of Heavy Industries and Public Enterprises has argued against the proposal, stating that levying tax on diesel vehicles will be inappropriate since there is no ‘empirical study’ to prove that diesel is a dirty fuel. The ministry has also asked to conduct a "multi-pronged study" on the effects on environment by diesel vehicles, and then impose green cess based on the findings from the report. Meantime, ban on registration of diesel vehicles should be lifted says the ministry since this has not only been affecting the economy and FDI, but is also proving out to be major hurdle in bringing foreign investments into the country.
The Supreme Court reiterated to the above plea, saying that it will modify or hold back the order if the ministry produces a credible study that proves that diesel is not an "undesirable fuel".
Since December 2015, sales of diesel cars with engine capacity more than 2,000cc have been banned in Delhi-NCR. Recently, the ban was also imposed in Kerala. Manufacturers like Mercedes-Benz, Toyota, Mahindra etc., were hit the hardest by this order since the ruling prevents them from selling their bread-and-butter products in these regions. The recent developments are sure to bring a sigh of relief to the affected manufacturers since either ways – whether the green cess is levied or not - the Supreme Court is willing to lift the ban.