The Supreme Court heard FADA’s appeal on March 27, and given the special circumstances, has offered an extension of 10 days, post the end of the ongoing 21-day lockdown period, to sell BS4 vehicles.
Recently, the Supreme Court ruled in favour of the Federation of Automobile Dealers Association (FADA), easing the March 31 deadline for sale of BS4 vehicles. Previously the apex court had declined to even hear FADA’s appeal, however, with the nationwide coronavirus lockdown, dealers were stuck with a huge number of BS4 inventory and no way to clear them before March 31. Furthermore, some customers had bought BS4 vehicles but were not able to register it due to the 21-day lockdown. So, on Friday, March 27, 2020, the Supreme Court heard FADA’s appeal and given the special circumstances, has offered an extension of 10 days, post the end of the ongoing 21-day lockdown period, to sell BS4 vehicles. Here’s everything you need to know about the Supreme Court’s ruling on the sale of BS4 vehicles.
- FADA lawyers presented the case in a Video Conference (VC) hearing, which was conducted in front of Supreme Court Justice Arun Mishra and Justice Deepak Gupta. FADA argued that 15,000 passenger cars, 12,000 commercial vehicles, 7 lakh 2-wheelers are at stake due to, first the slowdown in the industry and the later the drop in footfall at showrooms due to the coronavirus pandemic.
- FADA wanted an extension of at least a month, however, the court said that there is no point in extending the deadline for sale of BS4 vehicles and burdening the environment anymore.
- Given the special circumstances, however, the Supreme Court said that it will allow dealers to sell BS4 vehicle only for 10 days after the lockdown ends. The 21-day lockdown period will end on April 14, which means dealers can sell their BS4 stock till April 24, 2020.
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- The court order also says that dealers can only sell 10 per cent of the unsold BS4 inventory, however, the court has said that no BS4 vehicle can be sold in Delhi and NCR. This means that 90 per cent of the BS4 inventory will remain unsold.
- The apex court has also ruled that any BS4 vehicle sold during the extension period must be registered within 10 days. This also means that all those customers who have bought a BS4 vehicle but are not able to register it due to the lockdown will be able to register the vehicles post the lockdown ends.
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- However, the ruling only applies to BS4 vehicles that are in stock with dealerships. All new vehicles that will be manufactured from April 1, 2020, will have to comply with the new, more stringent BS6 emission regulations.
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Currently, the two-wheeler industry alone is left with BS4 inventory worth ₹ 4,600 crore, while dealers are left with an inventory of approximately 8,35,000 units. Furthermore, with the production being halted, the Society of Indian Automobile Manufacturers (SIAM) has already estimated a minimum loss of ₹ 2300 crore each day.