The Supreme Court on Friday issued an order lifting the eight-month-old ban on sale of diesel cars with over 2,000 cc in the capital, which was imposed citing environmental concerns. Auto major Toyota was one of the worst hit and it stated that the ban has impacted around Rs 1,700 crore of its business. In an interview with T E Narasimhan,Shekar Viswanathan, vice-chairman, Toyota KirloskarMotor elaborates on what his view on the lift of the ban. Edited Excertps:

How do you see the Supreme Court order allowing sales of diesel cars above 2000 cc?
The significance of the order is that it allows us to do business now. The fact that we can now sell our cars in the Delhi-NCR region will mean that we can focus on our customers who have been waiting for this car for the last eight months. The significance also is the fact that we all know that diesel is not a polluting fuel or it is as polluting as any other fuel is and that is not really the cause of pollution in Delhi. I think this issue still needs to be addressed by the authorities. But in some way we feel that we are exonerated that the ban has now been removed and we will have to pay one per cent for this purpose. We don’t want to pay this one per cent, but we have little choice on the matter.

There are questions raised on whether the Supreme Court can levy a cess. What is your opinion?
I am not the person who can comment on that. That is a matter between the government and the judiciary for them to resolve. My common understanding is the matters of taxation affairs are left to the executive, in which case this is the domain of Finance Ministry. So finance ministry has to formulate an opinion on this.

The reason why this has been levied and the reason we have accepted is because we want to do business in India. One per cent may not be big for the government or for the court, but for an individual consumer, it is very big and given the wafer-thin margin at which we offer it, one per cent is also big for us. It is only in India that the incidence of taxes on cars is very very high.

Would you be passing this on to the customer?
Of course.

Do you think that the Supreme Court order has brought an end to all the issues?
I don’t think it has brought an end. It has only emboldened some people who may think that this is a penalty. This is no penalty on us. We have only accepted the cess because we want to do business, not because our cars are polluting. Unfortunately it will only encourage people to engage in misleading information to the Supreme Court. We would urge that everybody involved in this process bring about a scientific approach to the levy of any cess or any assessment on pollution.

As long as we are allowed to sell, without cess, that is what we want. The option to this could be, we can request the government to bring down the taxes. We have already spent a lot of time in court, last eight months trying to convince the court. The court seems to want to listen mainly to the environment pollution control authority, which is the body created by the Ministry of Environment. They need to understand the issue and articulate to the government. We have said everything that we needed to say to the government.

What was the impact of the ban on Toyota’s business?
Ban has impacted around Rs 1,700 crore to us. Other than the monetary loss, the other thing is the loss of trust in India. This ban has been imposed on us despite our compliance with all the emission norms laid out by the Government of India.

Do you think the ban has affected your reputation, since it was said that 2,000 cc plus vehicles are pollutants and your product also was in that category?
The customers are actually stunned to think that somebody think that Toyota vehicles are polluting. They know very well that that is not true. If anybody’s reputation has suffered that is EPCA’s reputation.

When do you plan to re-enter the Delhi market?
We are ready to enter now, once the registration process starts.

I only wish that all people develop a scientific approach on assessing pollution instead of targeting 2,000 cc-plus vehicles. It must be understood that the emission levels and engine capacity of 2,000 cc vehicles, are no way corelated. Second thing that must be understood is that all fuels are pollutants, not just diesels. I cannot understand the reason why diesel is being vilified.
[Source: Business Standard]