BH Correspondent, Kolkata: The looming BS IV to BS VI transition March 31 deadline was proving to be a double-whammy for car and two-wheels retailers who have been struggling to clear unsold stocks at a time when the market was slow due to downturn in economy in general and the impact of coronavirus pandemic overall in the country.
On Friday, the Supreme Court heard a petition filed by the Federation of Automobile Dealers’ Associations (FADA) praying for the extension of the deadline for the sale and registration of BS IV compliant vehicles till May-end.
“Our lawyers will put in their best efforts to explain the unprecedented situation dealers face in liquidating the BS-4 stocks and hope that Hon’ble SC grants us relief,” said Ashish Kale, FADA President when the petition was filed a few days ago.
After hearing the arguments, the Supreme Court has allowed auto dealers to sell 10 per cent of BS IV inventory beyond the March 31 deadline. The top court, which is hearing only urgent cases during the 21-day lockdown amid the coronavirus outbreak.
The ruling states that no BS IV vehicle can be sold in Delhi NCR and the vehicles have to be registered within 10 days of sale. As of now, the 21-day lockdown period will end on April 14 (uses extended), which means dealers can sell their BS IV stock till April 24, 2020.
The decision has been welcomed, but there are reservations in the industry as it is roughly estimated that there are about 7 lakh units (cars and two-wheelers) BS IV inventory, cumulatively worth over Rs 6,300 crore lying with retailers. Harshil Choksey, MD, Autobahn Group said, “We are not too happy with the announcement. Ideally, the deadline extension should’ve been till June 2020, given that the buying sentiment will be low once the lockdown had been lifted.”
The Supreme Court’s decision comes as a surprise at a time when the government has granted relief in several sectors, including extension of deadline for tax filings and allowing a three-month moratorium on EMIs for bank loans.
The court said, “Let’s learn to sacrifice, do something for country’s environment, have sympathy… We understand the psychology of businesses and dealers… You want to take advantage of Corona(virus) for a few days of lockdown in March.”
The problem is what happens after the cut-off date even if some BS IV inventory is cleared. Either they have to be scrapped, dismantled for spares or exported to countries which can accept them. And all these options are not cheap.