Mercedes is Ready to Pay 1% Environmental Tax in India if Diesel Ban is Revoked

German car maker Mercedes Benz's plea to the Indian Supreme court comes as a bid to bypass the ban on registration of cars with engine bigger than 2cL. They have agreed to pay a 1% green tax for being able to sell their larger diesel cars in India. The green surcharge is likely to be paid at the time of registration of the vehicles.

The Supreme Court, in December 2015 banned the sale of diesel vehicles with an engine capacity of 2cL or more in the Delhi-NCR area. This ban was initially slated for three months but was extended with no expiration. Mercedes Benz was affected significantly by this decision as most of its diesel cars are equipped with engines falling under the ban.

The Environment Pollution Prevention and Control Authority for the National Capital Region has recommended a green tax of 20-22 percent on diesel vehicles and called the Mercedes offer as too small.

The Chief Justice of India noted on several occasions that the court will lift the ban if auto manufacturers are ready to submit to the environmental tax.

The Supreme Court will hear the matter on August 12.