Supreme Court likely to lift diesel ban for a one-time cess

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Mercedes-Benz GLC 220d (131)

In what seems to be a big relief to automobile manufacturers such as Mercedes-Benz and Toyota, the Supreme Court of India recently gave an indication for lifting the ban on the registration of new diesel vehicles with a displacement of 2000cc or more in the capital of the country.

Also read: Defence Minister Manohar Parrikar describes the diesel ban as baseless and illogical

A proposal by the court suggests an interim green cess of 1% of the ex-showroom cost of the vehicle to lift the ban that has been in place since seven months. The manufacturers can deposit the amount for each unit in an escrow account. Based on the interim cess that could be leived, the centre raised two objections:

  • The court has no jurisdiction to levy tax as it falls under the domain of the government
  • The court was not right withholding the perception that “diesel is the devil”

New Toyota Innova Crysta engine

Attorney General Mukul Rohatgi said that the likely imposition of green cess for diesel cars of more than 2000cc engine capacity will not be in consonance with the constitutional scheme of things in terms of Article 265 of the Constitution of India. Article 265 states that ‘no tax can be levied without the authority of law’ and such cess must be imposed through legislation by authority of Parliament.

Also read: Kerala High Court extends stay on NGT’s diesel ban order

He further requested the court to give the government six weeks to conduct a detailed study on various issues related to diesel cars, their emissions, utilization of subsidized fuel by these costly cars and SUVs and arrive at an amount that should be imposed on car manufacturers.

Source: ET Auto

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