Ambiguity over emissions law shows up after SC ruling

The BS-IV ruling on the end of road for BS-III vehicles by April 1, 2017, was upheld by the Supreme Court yesterday. But the devil lies in the detail regarding whether the ban is applicable on the date of manufacturing or the sale date which has become a cause for huge grievance.

All automobile manufacturers have unanimously accepted the ruling that they can't sell BS-III and below products beyond April 1. However, they say that the law stipulated the date of ‘manufacturing’ and not ‘sale’, and, therefore, they should have been allowed to sell non-BSIV vehicles beyond the deadline. In a statement released last evening, SIAM said, "The auto industry is law abiding and is in full compliance with the emission norms set by the government that stipulates date of 'manufacturing'. The historical implementation of emission norms (BS-II, BS-III) also reinforces the current law that stipulates 'manufacturing'." 

The Supreme Court yesterday observed that the commercial interest of manufacturers and dealers does not take primacy over the health hazard due to potential increased air pollution from these vehicles, and thus ruled that these vehicles cannot be sold post-April 1, 2017. However, registration of such vehicles will be permitted, provided that proof is submitted that such a vehicle was sold on or before March 31, 2017.

The ruling also means that the unsold stock with manufacturers and dealers will now either have to be upgraded to BS-IV compliance, which is technically demanding and financially unviable, or sold in a hurry between today and tomorrow. The third option is, if possible, to export to the markets where BS-III emissions are still allowed.

The view that public health takes precedence over commercial interests of manufacturers and dealers is correct. However, what can also be termed as harsh is the unexpected decision of the court to make 'sale' and not 'manufacture' as in the law as the defining parameter for the BS-III cut-off. This is echoed by India's one of the leading automobile manufacturers, Mahindra. It said, "The law related to the implementation of BS-IV emission standards for vehicles from April 1, 2017 across India provided for allowing the sale and registration of BS-III vehicles manufactured prior to April 1, 2017, in the same manner as in such transitions over the last 12 years. However, the Supreme Court of India ordered yesterday that such stock should not be allowed to be sold from April 1, 2017. The government had explained to the Supreme Court through the Solicitor General that, as in the past, vehicle manufacturers should be allowed to liquidate their BS-III inventory. But the court has passed an order banning the sale of such BS-III vehicle stock and thus overriding the law in place, on the basis of which the company had planned its operations. This unexpected ruling has perplexed the industry and will have a one-time material impact even on the company."

By not producing non-BSIV-compliant vehicles post April 1, automobile manufacturers are abiding by the law. But given the fact that the industry needs to hold a month or two worth of stock, what could have helped is an early intervention by the government to clarify the law, which could have avoided this last-minute affair. Hopefully, when BS-VI is introduced in 2020, this fiasco would not repeat. 

Also read: SC upholds ban on non-BS IV vehicles' sales from April 1