Delhi diesel car ban lifted; 1% green cess imposed

The Supreme Court has lifted the ban on the registration of diesel cars having engines bigger than 2,000 cc in Delhi and NCR. The ban was imposed in December 2015 in order to curb rising pollution levels in the city. This resulted in huge losses to manufacturers like Toyota and Mercedes-Benz. Automakers like Mahindra had to develop new smaller engines to maintain sales in the country's biggest automotive market.

The decision comes after companies like Mercedes-Benz and Toyota moved to the Supreme Court against its ban on diesel vehicles. They also agreed to pay an extra environment tax of 1% on sales of diesel cars that have an engine capacity of 2,000 cc and more.

This prompted the apex court to lift the said ban and impose a 1% green cess. As a result, manufacturers selling diesel vehicles with engines larger than 2,000 cc will need to pay 1% tax on the ex-showroom price of each vehicle. This amount will be deposited in a separate bank account, opened by the Central Pollution Control Board in a PSU bank.

The Supreme Court bench that announced the decision also made it clear that the 1% green cess is a temporary tax, which can either be increased or decreased in the future, as per the court's discretion. Moreover, the Court may also extend this tax to vehicles with engines smaller than 2,000 cc, or even remove the tax altogether, as proposed by the Union Government.

Source: Economic Times