The Telegraph
Monday , May 30 , 2016

Cess fix for diesel car ban

Calcutta, May 29: Auto companies such as Toyota and Mercedes, which have been hit hard by a Supreme Court ban on diesel cars of engine capacity 2,000cc and above in Delhi-NCR, may have to shell out an environment cess to be able to sell these vehicles.

At the last hearing on the case on May 9, the apex court judges said they might modify the ban and impose an environment cess to allow the sale of the diesel vehicles.

"Twelve per cent of our annual Innova sales and 23 per cent of our annual Fortuner sales have been affected by the Supreme Court order. We have no choice but to pay the environment cess if that is what the court wants," said Shekhar Vishvanathan, vice-chairman and wholetime director of Toyota Kirloskar Motor.

As many as 11 models of Mercedes are affected by the ban. About 20 per cent of its sales come from the National Capital Region (NCR).

While the company is officially saying that "it will wait and watch", it has no other option but to pay the token environment cess if it wants to cater to the crucial NCR market.

This cess will be over and above the 4 per cent infrastructure cess that both the companies have to pay based on their engine capacities and the 1 per cent luxury tax imposed on vehicles above Rs 10 lakh. The burden is likely to be passed on to the customers.

Both the companies, however, are baffled by the "injustice" of the ban. "We have compiled with all the laws and met emission norms. We deploy the latest technology in our machines. The Environment Pollution Control Authority has wrongly targeted us. It is a fallacy to state that bigger engines pollute more. There is no correlation between engine capacity and emissions. We have catalytic converters that filter out the harmful gases. The bigger cars are more expensive with better technology," said Vishwanathan.

When asked why the company was ready to pay the cess, the vice-chairman said, "We are in no position to fight. If the only way out of this is to pay cess, we are ready to do that."

The cess, the company official said, "would be to the tune of one per cent of the real value of the vehicle".

Vishwanathan wondered why the ban was not extended to lesser sized engines and said there was a need to compensate people who lost their jobs.

"The ban has now been on for six months, we have lost people, lost money on training these people, besides losing money in business and also in credibility with our parent company in Japan. Why should the customers be denied a product that has been there for the last 10 years. The Innova was launched in India in 2004-05 and the Fortuner has been here since 2009," he said.

 More stories in Business

  • Coal India hikes prices by 6.3%
  • Tata Steel inclined to hold on to UK assets
  • Bright prospect for piped gas
  • Cleartrip backs city start-up
  • FM upbeat on greater Japanese funds flow
  • Future fortune