We accepted cess because we want to do biz here: Shekar Viswanathan

Interview with vice-chairman, Toyota Kirloskar Motor

The Supreme Court's order on Friday lifted the eight-month-old ban, on sale of diesel cars with engines of 2000cc or above in the National Capital Region (NCR), imposed citing environmental concerns. Automobile major Toyota had stated its business was impacted by Rs 1,700 crore. Shekar Viswanathan, vice-chairman, Toyota Kirloskar Motor, talks to T E Narasimhan. Edited excerpts:

How do you see the Supreme Court order?

That we can now sell our cars in the NCR will mean we can focus on customers who have been waiting for these for the past eight months. The significance is also we all know that diesel is not a polluting fuel or as polluting as any other fuel, and not really the cause of pollution in Delhi. This issue still needs to be addressed by the authorities. In some way we feel we are exonerated that the ban has now been removed. We’ll have to pay one per cent for this purpose. We don’t want to pay but we have  little choice on the matter.

There are questions raised on whether the Supreme Court can levy a cess. What is your opinion?

That is a matter between the government and the judiciary. My common understanding is the matters of taxation were left to the executive, which is the domain of finance ministry. The ministry has to formulate an opinion on this.

The reason why this has been levied and why we have accepted it is because we want to do business in India. One per cent might not be big for the government or for the court but for an individual consumer, it is huge and given the wafer-thin margin at which we offer it, this is also big for us. It is only in India that the incidence of taxes on cars is extremely high.

Would you be passing this on to the customer?

Of course.

Do you think the Supreme Court order has brought an end to all the issues?

I don’t think so. It has only emboldened some people who might think this is a penalty. This is no penalty on us. We have only accepted the cess because we want to do business, not because our cars are polluting. Unfortunately, it will only encourage people to engage in misleading information to the Supreme Court. We would urge  everybody involved in this process bring about a scientific approach to the levy of any cess or any assessment on pollution.

As long as we are allowed to sell without cess, that is what we want. The option could be that we could request the government to bring down the taxes. We have already spent a lot of time in court, these past eight months trying to convince the court. The court seems to want to listen mainly to the Environment Pollution Control Authority (EPCA), which is the body created by the ministry of environment. They need to understand the issue and articulate to the government. We have said everything we needed to say to the government.

What was the impact of the ban on business?

The ban has impacted about Rs 1,700 crore on our business. Other than monetary, the other is the loss of trust in India. This ban has been imposed on us despite our compliance with all the emission norms, laid out by the government. Therefore, we tell our principles that our cars have been banned; they are at a loss to understand why. If you are compliant with the law and get punished, I think it is unfair.

Do you think the ban had affected your reputation since it was said 2000cc vehicles are pollutant and your product was also in that category?

The customers are actually stunned that somebody think Toyota vehicles are polluting. They know very well that is not true. If anybody’s reputation has suffered, that is EPCA’s reputation.

When do you plan to re-enter the Delhi market?

We are ready to enter once the registration process starts.

I only wish all people develop a scientific approach on assessing pollution instead of targeting 2000cc plus vehicles. It must be understood that the emission levels and engine capacity of 2000cc vehicles are no way correlated. The second thing that must be understood is all fuels are pollutants, not just diesel. I cannot understand the reason why diesel is being vilified.