In a notification to the stock exchange Thursday, carmaker Mahindra and Mahindra said no penalty for its alleged violation of India’s emission norms in 2022-23 was being levied on the company or considered to the “best of (its) knowledge”. On Thursday (November 28), The Indian Express reported that Mahindra along with seven other carmakers like Hyundai, Kia and Honda, was found to have higher than mandated fleet emission levels in financial year 2022-23, for which the government had calculated penalties worth around Rs 7,300 crore. This paper reported that Mahindra’s fine was calculated to be Rs 1,788.4 crore. “To the best of our knowledge, no such Penalty has been levied or is being considered,” Mahindra said in the exchange filing. For 2022-23, the Bureau of Energy Efficiency, under the Union Ministry of Power, required car companies of all units sold during the year to achieve India’s Corporate Average Fuel Efficiency (CAFE) norms. This meant a fuel consumption of not more than 4.78 litres per 100 km and carbon dioxide emissions of not more than 113 grams per km (since it has a direct correlation with the amount of fuel consumed). Mahindra also said that any penalty could not be applied retrospectively, and the company does not expect any “material liability” for FY2023. The Indian Express had reported that the quantum of penalties has become a point of contention between the Centre and the auto industry. Car makers are learnt to have argued that the new and stricter penalty norms came into effect only from January 1, 2023, and therefore calculating penalties on the basis the cars sold in the entire financial year would not be appropriate. “In December 2022, Energy Conservation Act 2001 (“EC Act”) was amended to include penalty for vehicle manufacturers in case of non-compliance of CAFE Norms. It was clearly stated that this amendment is effective from 1st January 2023 only. Applying the amended penalty under EC Act for the full period of FY2023 would mean the penalty is being applied retrospectively, which is incorrect. Hence, the Company doesn’t expect any material liability for FY2023,” Mahindra said. Mahindra's scrip ended 3.5 per cent lower at market close Thursday.
