The SC’s order is not applicable in the Delhi/NCR region

The Coronavirus pandemic that has gripped the entire world has made the Supreme Court reconsider its decision on moving forward the BS6 deadline. Car dealers were previously offering huge discounts to clear their BS4 stock but that plan is now on hold due to the lockdown. Dealerships will be allowed to sell their unsold inventory of BS4 vehicles once the Coronavirus lockdown is lifted.

However, the SC has put in place a few conditions. Firstly, dealers will be able to sell BS4 vehicles only for a period of 10 days once the lockdown is lifted. BS4 vehicles that have already been sold but couldn’t be registered due to the lockdown will also be registered in this period. Secondly, only 10 per cent of the unsold inventory can be sold in that period. And lastly, the deadline extension will not be applicable to the Delhi/NCR region.

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The SC had previously heard the same case in February 2020. The Federation of Automobile Dealers Associations (FADA) had then urged the country’s top-most judiciary body to extend the deadline by a month, as the slowdown in the automobile sector had led to an inventory pile-up of BS4 vehicles. The SC had then refused to extend the deadline. However, when FADA brought forward the same request on grounds of the Coronavirus lockdown, the SC did offer some relief. However, this conditional relief is a surprise when other sectors of the economy have been granted comprehensive relief measures. 

The Supreme Court’s decision to extend the deadline might bring temporary relief to carmakers and dealers, but it raises more questions than it answers. Firstly, why allow for only 10 per cent of the inventory to be sold in the grace period? Secondly, why does the extension not apply to the Delhi/NCR region? We are currently waiting for answers on these questions and will update this story once that happens.