Who will bear the 1% cess ordered by SC?

Well, there is no doubt that Delhi, the capital of the nation is highly polluted as far as air pollution is concerned. To deal with this problem plaguing the city, the Supreme Court, on December 16, 2015, had banned the registration of luxury automobiles and sports utility vehicles with an engine capacity in excess of 2000cc in NCR, responding to concerns over increasing air pollution in the national capital, blamed on emissions by diesel vehicles. The move of the apex court, had adversely affected the top car manufactures of the country.

The ban which was proposed by the National Green Tribunal saw a setback on August 12, 2016, when the Supreme Court lifted the ban on the same. Eight months’ ban was lifted on the condition that automobile makers would pay a levy equal to 1 per cent of the ex-showroom price of diesel vehicles with an engine capacity above 2000cc, ruled a three-judge bench of the apex court. The news certainly has an impact on listed auto makers like Tata Motors, Mahindra & Mahindra and Maruti Suzuki.

According to SIAM(Society of Indian Automobile Manufacturers), in the three months uptil June quarter, the percentage of diesel vehicles fell to 27, of the total passenger vehicles sold in India. On the other hand, it could be interesting to see the sales figures of diesel cars (above 2000cc) in FY18, which are expected to be better than Q1FY17 numbers. But the most important part will be whether the cess levied will be borne by the buyers.