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Supreme court lifts ban from diesel car registration in Delhi-NCR, additional 1% Green cess imposed

After 8 months of being in uncertainty, a good news has come out for car manufacturers in India. The Supreme court has finally called off the ban on the registration of diesel vehicle with engines larger than 2000 cc in the Delhi-NCR region. Although extra levy of 1 % green cess will be charged on these vehicles on the ex-showroom price, to be deposited before the Central Pollution Control Board. The judgement was based on the appeal filed by Mercedes-Benz, and was taken by the SC bench consisting of Chief Justice TS Thakur and Justices AK Sikri and R Banumathi.

In December 2015, the Supreme court banned registration of the new diesel vehicle with engines larger than 2000 cc on the proposal of National Green Tribunal (NGT). The decision showed horrible effect on the car manufacturer like Toyota Kirloskar Motor, Mercedes-Benz and Mahindra & Mahindra who have larger part of their portfolio with the diesel cars. While Mahindra was quick to react and launched 1999 cc engines for their two main SUVs, Toyota and Mercedes were uncertain about their future plans. The companies reportedly halted their investments in India due to uncertainty.

After about 8 months of the ban, Toyota announced that they have faced a loss of about ₹ 1700 crore due to inability of sales of the big cars in the Delhi-NCR region. Mercedes-Benz must have had a bigger amount of loss as all of their diesel cars are powered by 2143cc or 2987cc engines and Delhi indeed is the largest market area for them. Infact the proposal of paying 1% green cess if the ban is lifted was made by Mercedes-Benz.

The Auto industry was never happy about the ban and opposed it in one voice. The argument always was that why automobiles are being made soft target in pollution matters when there are many bigger reasons behind the increasing amount of pollution in the city.

The decision must also be pleasant for Jeep which is all set to make it’s Indian debut at the end of this month and two of their initial three SUVs are powered by larger diesel engines.


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