1% green cess on diesel cars not enough, say environmentalists

Environmentalists were let down on Friday when the apex court on Friday reversed its own judgement on banning diesel cars with engines larger than 2000 cc on Delhi roads on payment of one per cent green cess. But, the car industry heaved a sigh of relief.

“What is one per cent on a car worth over ₹50 lakh? Just ₹50,000. Once it has been agreed that it (diesel) is a polluting vehicle and then allowing them to ply with a minor cess, goes against the grain of ‘polluter pays’ principle, which is aimed at remedying the damage done and desisting from further harm. This is allowing them to pay and pollute,” Advocate Ritwick Dutta said.

The sentiment was echoed by Anumita Roychowdhury, Executive Director of Research and Advocacy and Head of the air pollution and clean transportation programme, Centre for Science And Evironment, said the concession of one per cent cess was disappointing.

“SC has established the principle that diesel cars are more polluting. But the one per cent cess is not enough,” she said.

At a later date, the court is also expected to hear a submission made by senior advocate and Amicus Curiae Harish Salve on equalising the fuel taxes paid by petrol and diesel users, which would increase the ECC to over 20 per cent.

“The entire debate is based on the argument that we have to equalise taxes paid for petrol and diesel,” Roychowdhury said.

However, it is uncertain if this cess would be increased later and whether such a cess would be extended to smaller diesel cars as well. The Government had earlier told the SC that it was not in a position to impose a cess on diesel cars and that such a move was the imperative of the executive.

According to a submission made by the Environment Pollution (Prevention and Control) Authority (EPCA), on which Salve’s application is also based, the retail difference between petrol and diesel stands at over Rs 10 per litre. Thus, while diesel is slightly more expensive than petrol before taxes, at the retail point, because of lower taxes imposed on it, it becomes significantly cheaper.

The EPCA recommended a 22 per cent tax on diesel cars over 1500 CC and 20 per cent on those less than 1500 CC to equalise this difference. The Authority had also noted that if the calculations were to account for inflation, the taxes would stand at over 40 per cent.

Pawan Goenka, Executive Director, Mahindra & Mahindra Ltd, said “Hope this decision will put all controversy surrounding diesel fuel behind us and we will be able to focus on the more important task of making our vehicles compliant with BS 6 norms by April 2020.”

“We have followed the earlier direction of the Supreme Court and filed an Interim Application seeking relief on the ban on our cars. Following the court suggestion, we as a voluntary interim measure, offered to pay 1 per cent of the ex-showroom price of the vehicle towards anticipated Environment Compensation Charge as a deposit, and not on the premise that our vehicles are polluting the environment,” said Mercedes-Benz India.

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