BS-IV sales deadline extended: SC gives small window after lockdown for automakers to clear stock

The Supreme Court has allowed the automakers to sell their BS-IV inventory for 10 more days after the 21-day lockdown. In its judgment, the apex court has given relief to the auto companies and has allowed them to sell up to 10 percent of vehicles made to Bharat Stage IV (BS-IV) pollution standards. However, the BS-IV vehicles have not been allowed to be sold in the Delhi-NCR area. The SC was hearing a petition by the Federation of Automobile Dealers Association (FADA) via video conferencing amidst a 21-day lockdown announced by the central government.

As the country moves from the BS-IV to BS-VI standard vehicular norms which call for cleaner fuels, the SC had allowed the registration of BS-IV up to 31 March 2020. BS-VI norms will come into effect from April 1, 2020. In its judgment, a Bench of Justices Arun Mishra and Deepak Gupta ruled, "In Delhi-NCR region, we are not allowing sale and registration of these kinds of vehicles anymore. However, in the remaining part of the country, due to the situation which has arisen due to lock-down, it is ordered that not beyond 10 percent of the vehicles, except with dealers in Delhi-NCR region, are permitted to be sold out of the aforesaid number of vehicles to make up the good of six days which were available before the lock-down has been ordered in the country."

FADA requested for 30-day extension

Federation of Automobile Dealers Associations (FADA), however, had requested a 60-day extension due to the prevailing situation which eventually may result in bankruptcies and job losses. As per a report in financial daily Mint, BS-IV inventory worth more than Rs. 6,350 crore, including around 7 lakh two-wheelers valued at Rs.3,850 crore, 15,000 passenger vehicles worth Rs.1,050 crore and 12,000 commercial vehicles worth Rs. 1,440 crore have been stocked at the dealership across the country.

The decision by the SC may not be enough for the automakers as it will have to look for other options to clear the huge stockpiles of BS-IV vehicles. One of the options the auto companies may explore it to export to the countries where BS-IV standard vehicles are still allowed to sell but in that case, the cost will have to be borne by respective auto companies.