Good News for Luxury Car Companies

Jan 01, 1970
Good News for Luxury Car Companies

Finally some relief for the luxury car makers in the capital. After the long battle in courts the auto companies and their representatives have finally managed to get the ban on diesel cars above 2000 cc lifted. However there is a caveat and the condition at the moment is to pay a environment levy of 1% of ex- showroom price of the vehicle.

Timeline of the Ban

In December 2015 the supreme court banned registration of new vehicles in Delhi with diesel engines and a displacement of 2000 cc or more.

This ban hit the auto industry hard especially the luxury car makers like Mercedes Benz, Audi and the likes since they have a lot many vehicles which fall into the “banned” category. And delhi being an important market for these auto companies, the ban puts them in a more uncomfortable position. As was obvious the ban was not met with much appreciation from them and the army of lawyers these big corporates have came into action to work on getting a solution to this ban.

Then in July 2016 reports came out that diesel cars above 2000cc will be able to ply on the roads of the capital with a one time payment of green cess. However those were still reports and no confirmed a decision was taken in July. But it was still good news for car makers since paying a legit tax and still be able to sell their cars in New Delhi makes good business sense for them. More so because like always the taxes would be transferred to the actual customers and the car companies would be just passing the burden to the end user.

In fact the car maker Mercedes Benz who plead the supreme court on lifting the ban suggested that if everyone agrees then paying a green tax would be the best solution for everyone involved.

Now on August 12th 2016, the news has come out the ban is finally lifted and diesel cars having more than 2000 cc can be registered in New Delhi on the condition that they have paid 1% of ex showroom price of the car as green duty.

Good News for Luxury Car Companies

What happens now?

Now the court has to decide if the suggested 1% duty is fine or if they would increase this duty to discourage users to buy these heavy vehicles in Delhi where pollution levels are increasingly dangerously and a collective effort can only make Delhi better to live for its residents. The car makers on their part will just have to inform their customers that these cars can be registered only if they are willing to pay 1 % of the ex-showroom price as green duty called “Environment Compensation Charge”. Yes this is the official name and which is something commercial vehicles in Delhi are already paying. However only time will tell if this is solution will stick or something else comes along.

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