‘Can’t levy cess on diesel cars to fight pollution’

Citing a survey conducted by Nielsen in 2013, the ministry has pointed out that the transport sector accounted for just 17 per cent consumption of diesel, with private cars and utility vehicles consuming only 13.15 per cent. “Thus, targeting the segment which consumes merely 13.15 per cent of diesel may not yield the desired result,” the ministry told the Green Bench of the Supreme Court.

It also pointed to its policy decision taken to encourage the automobile sector, identified as the “sunrise sector” of the economy, especially the small car segment.

The ministry said the “lasting problem of dieselisation” lies in removing the price disparity. Underlining that the price differential was already shrinking, it said the government had decided to de-regulate diesel prices in a phased manner to completely eliminate subsidy.

In India, more than 90 per cent of the SUVs run on diesel while 34 per cent of the small cars and 70 per cent of the large/ medium cars are diesel-driven, said the affidavit filed jointly by the Ministries of Finance, Environment and Forest, Petroleum and Natural Gas, Surface Transport and other concerned departments in reply to a plea made by senior advocate Harish Salve, who is an amicus curiae in the environment-related PIL.

During the last hearing in February, Salve had presented in the court a report of the Environment Pollution (Prevention and Control) Authority to claim a link between the death of 3,000 children annually in Delhi to the increased pollution level, attributing it mainly to a spurt in diesel cars.

Salve urged the court to accept and pass orders on the recommendation by the panel, which sought direction to impose additional 30 per cent environment compensation charge on private diesel cars. He said the funds collected should be utilised to produce clean diesel (10 ppm sulphur) to enable nationwide introduction of Euro V and Euro VI norms and scale up public transport.

The court had sought replies from the Centre, Delhi, Haryana, Uttar Pradesh and Rajasthan governments. The Centre, in its affidavit, has reproduced the finance ministry’s response over levying green cess on diesel cars.

It was decided not to single out diesel cars for an additional tax burden by way of enhanced excise duty, said the government. The affidavit said the excise duties on small cars, sedans and SUVs in the Interim Budget of 2014 were slashed to promote growth momentum in the economy.