The Supreme Court today extended the ban on registration of diesel vehicles above 2,000cc in Delhi-NCR for the third time. The ban, which gravely affects carmakers such as Toyota, Tata and Mercedes among others, will be in force until further notice.

However, the court said it was ready to modify its ban if an additional environment cess was worked out on sale of passenger vehicles above 2,000cc based on the price of the vehicle and its engine capacity, according to reports. In fact, it even suggested imposing the environment cess on lower capacity diesel vehicles. 

Meanwhile, the apex court agreed to lift its earlier rule banning diesel cabs having all-India tourist permits ferrying BPO employees in Delhi-NCR. Its order banning diesel taxis, however, continues as per its ruling on April 30, 2016, where it directed them to go off the roads in Delhi-NCR from May 1, 2016 refusing to extend the deadline for them to convert to CNG.

In a bid to tackle the rising levels of pollution in Delhi-NCR, the Supreme Court had imposed a ban on the sale of diesel cars and SUVs with engine capacities over 2,000cc in the region, starting mid-December until its expiry on March 31, 2016. However, the apex court extended this ban on diesel passenger vehicles until the next hearing, which took place on April 30, 2016. It then extended the restriction for a second time until its next hearing on May 9, 2016.

The indefinite ban on sale of large cars has put many automakers in a state of disarray with the automotive body Society of Indian Automobile Manufacturers (SIAM) saying the move points towards an erratic policy regime and has discouraged carmakers from investing in the country. In fact, the ban in Delhi, along with other factors such as imposition of additional tax on passenger vehicles announced in the Budget 2016-17, forced SIAM to cut its forecast for passenger vehicles sales growth in 2016-17 to six-eight percent from an earlier forecast of 11 percent.