Supreme Court extends BS4 deadline due to COVID-19 pandemic

Published On : 28 March 2020
By Tarashekhar Padhy

There is a piece of good news for the auto industry, the Supreme Court extended the March 31st deadline for BS4 vehicles' sales in India, giving an additional 10 days to cope up with the cease of the lockdown duration. Given the special circumstances, where dealerships are dealing with a tough time clearing their BS4 inventory because of the coronavirus lockdown, the apex court docket has ruled that most effective 10 percent, of unsold BS4 motors, maybe bought inside 10 days after the lockdown ends. The ruling also stated that no BS4 vehicle can be offered in Delhi NCR and the automobiles need to be registered within 10 days of sale. The 21-day lockdown period will cease on April 14, and dealers can promote their BS4 inventory till April 24, 2020.

The Federation of Automobile Dealers Association (FADA) and the Society of Automobile Manufacturers (SIAM) had moved to the pinnacle court docket for extending March 31 closing date on the market of BS4 automobiles. FADA put a point that as many as 15k passenger cars, 12k commercial vehicles, 700k 2-wheelers are at stake due to, first the slowdown in the industry and the subsequent drop in footfall at showrooms due to the coronavirus pandemic. However, the apex court docket stated that there may be no factor in extending the closing date on the market of BS4 automobiles and burdening the environment anymore. The courtroom announced, "Let's discover ways to sacrifice, do something for the country's environment, have sympathy. We apprehend the psychology of companies and sellers. You need to take advantage of Corona Virus for some days of lockdown in March."

Grant Thornton Advisory Partner, Saket Mehra, said, "This flow was anticipated, however, in reality, won't meet the preferred goal of clearing the BS-IV inventory because post the lockdown, purchaser sentiments will continue to be low, human beings will have a look at the warning in shifting out of their houses and the can be over careful in spending money in particular on capital assets. This won't result in the liquidation of inventory in the subsequent 10 days of giving up the lockdown. Perhaps, a 6-month extension should have helped in these unsure times." It has been anticipated that the Indian automobile industry is possible to suffer a predicted revenue loss of around Rs. 13,000 crores to Rs. 15,000 crores because of the coronavirus outbreak. Currently, the two-wheeler enterprise on my own left with BS4 inventory worth Rs. 4,600 crores, at the same time as dealers we left with an inventory of approximately 8,35,000 units.

Furthermore, with the manufacturing being halted, the Society of Indian Automobile Manufacturers (SIAM) has already anticipated a minimal loss of Rs. 2300 crore each day. Harshil Choksey, MD, Autobahn Group said, "We aren't too satisfied with the announcement. Ideally, the deadline extension should've been till June 2020, for the reason that the shopping for sentiment might below as soon as the lockdown was lifted. We were looking forward to liquidating shares at the cease of March with Gudi Padwa and the March-cease period preferably an auspicious time for the auto industry. Although now, the lockdown force postponed the strategies of the same. It might be a burden on the sellers and the banking sector as soon as the lockdown has been lifted to promote the pending 10 percent of the BS4 inventory inside 10 days."