Govt bats for sales of BS-III vehicles after April 1, SC to hear case tomorrow

The central government today came out in support of vehicle makers arguing before the Supreme Court that the March 31 deadline is for manufacturing and not sales or registration.

Quoting previous similar changes in emission norms (from BS-II to BS-III for instance) the government stated that in each case the deadline was meant for manufacturing while sales and registration of previous generation vehicles were allowed even after April 1.

The SC will continue to hear the case on Tuesday.

The apex was to decide today whether or not old and polluting Bharat Stage-III vehicles should be allowed to be registered after end of this month.

The fate of 824,000 unsold two and three-wheelers, trucks and buses was on the line today. Collectively worth over Rs 12,000 crore, the inventory runs the risk of being turned into junk if the apex court rules that such vehicles cannot be allowed to be registered.

On Friday, a bench of Justices Madan B Lokur and Deepak Gupta said that the Centre had spent thousands of crores of rupees to upgrade technology to produce BS-IV fuel and the companies could not be allowed to frustrate the government's initiative to check increasing pollution levels by selling around 8.2 lakh BS-III vehicles which they are holding in stock.

One alternative to banning the polluting vehicles that the Supreme Court had mentioned in its last hearing was the slapping of additional cess on the BS-III vehicles as a compensation towards polluting the environment. Even if this solution is adopted it would bring such vehicles on par, cost-wise, with a BS-IV vehicle and buyers will rather choose to buy the cleaner of the two.

Meanwhile, the Federation of Automobile Dealers Association (FADA), the apex lobby body of automobile dealers, has asked its vehicle makers to take back their unsold stock of BS-III vehicles if the Supreme Court decides to disallow their sales.

The Society of Indian Automobile Manufacturers (SIAM) had submitted data on manufacturing and sale of BS-III vehicles on a monthly basis from January 2016 and told the Supreme Court that the companies were holding stock of around 8.24 lakh such vehicles including 96,000 commercial vehicles, over six lakh two-wheelers and around 40,000 three-wheelers.

Irked by the reluctance of automotive companies to comply with the emission norms laid down by the government the Environmental Pollution Control Authority (EPCA) had moved the SC seeking a ban on sale of BS-III vehicles from April 1.

BS-IV vehicles have 80 percent less Particulate Matter (PM) and 50 percent less NOx emissions according to research findings. Bajaj Auto, Toyota Kirloskar and Daimler India have repeatedly voiced their opinions accusing majority of manufacturers of dragging their feet on the matter and refusing to comply with the norms.

Erich Nesselhauf, Managing Director and CEO, Daimler India Commercial Vehicles said, “In the current environment, OEMs ramping up BS-III vehicles aggressively before March 31 could create an imbalance to OEMs like BharatBenz that are ramping down BS3 vehicles. Selling BS3 vehicles should not be allowed after April 1, or at least the sales of those vehicles should be penalised in order to set off the additional cost and environment burden the society has to absorb. In general, it should not be allowed that some OEMs gain additional margins, delaying the implementation of the urgently needed new BS4 environmental standards."