SC lifts ECC exemption for essential goods vehicles entering Delhi

A three-judge bench directed all commercial vehicles entering Delhi to uniformly deposit ECC after the court found that its order granting exemption to essential goods carriers posed a “genuine” difficulty.

The Supreme Court has removed a decade-old exemption on commercial vehicles carrying essential commodities from paying the environment compensation cess (ECC) before entering the Capital, a decision that could ease the pollution load and traffic congestion at Delhi’s borders.

In its submissions, the MCD said that the long stoppages further deteriorated the air pollution level in the area, making the exemption granted by the top court on October 9, 2015 counterproductive.

In an order passed last Friday, a three-judge bench, headed by Chief Justice of India (CJI) B. R. Gavai, directed all commercial vehicles entering Delhi to uniformly deposit ECC after the court found that its order granting exemption to essential goods carriers posed a “genuine” difficulty. The order was made public on Tuesday.

First imposed by the Supreme Court in 2015, the ECC is a fee levied on commercial vehicles entering Delhi to mitigate air pollution. At the time, the court was acting on recommendations that addressed the city’s severe air quality issues. The charge is in addition to regular toll taxes and was aimed at discouraging polluting vehicles from entering Delhi as well as funding initiatives to improve public transport and pedestrian infrastructure.

The ECC was not levied on vehicles carrying essential commodities such as vegetables, fruits, milk, grains, egg, ice (to be used as food item), poultry Items, and salt as well as empty/partial laden vehicles.

As a result, till now, all commercial vehicles had to stop for physical verification before they were allowed to enter, resulting in serpentine queues of vehicles at the border gates.

The court order came on an application moved by the Municipal Corporation of Delhi (MCD) which cited “operational challenges” in implementing the court’s order. The civic body sought the uniform levy of ECC on all commercial vehicles entering Delhi.

In its submissions, the MCD said that the long stoppages further deteriorated the air pollution level in the area, making the exemption granted by the top court on October 9, 2015 counterproductive.

“ As such, all vehicles are required to be stopped at check-posts and subjected to physical verification, which results in prolonged stoppages and aggravates the problem of air pollution.”

The bench, also comprising justices K. Vinod Chandran and N.V. Anjaria, further noted that its order will not impact the price of essential commodities as “the levy imposed is not of such a high nature”.

The civic body calculated the impact on the price of essential commodities to vary from Rs.0.13 to Rs. 0.28 per kg only.

Still, ECC will continue to remain exempted for ambulances, fire engines and oil tankers. MCD officials said that the changes will come into effect soon and an official communication is being sent to the private agency collecting charges.

A senior civic official said the new order will ease traffic congestion on border points and boost the revenue for the environment fund. The move will also help in the planned projects for integrating the Delhi toll tax collection system with the NHAI’s Fastag system.

A senior municipal corporation official said, “The empty goods carrying vehicles were provided 50% exemption from ECC, while the ones carrying essential goods like milk, vegetables etc were provided 100% exemption. To provide these exemptions, we need to physically stop the vehicles, inspect them, click pictures which leads to queue build up. The refund is provided to the concerned vehicles on the next day. With uniform ECC rates, we will not stop vehicles and flow on border points will improve.”

Appearing for the MCD, senior advocate Sanjiv Sen, said, “The continuation of these exemptions undermines the intent and scope for which ECC was introduced.”

Saying that all commercial vehicles should to be held equally accountable for their contribution to environmental degradation, Sen said, “The unchecked movement of these vehicles through toll points, while other vehicles being made to bear the ECC burden, creates disparity. It diminishes the deterrent effect of the ECC and weakens collective efforts to mitigate pollution.”

Senior advocate Aparajita Singh assisting the court as amicus curiae informed the court that the exemption was granted in 2015 to ensure essential commodity vehicles are allowed a free pass to deliver goods meant for public good.

The court noted her concern and said, “The application has been filed on behalf of the MCD. They have submitted that, on account of the exemption granted by this court, serious difficulties are faced as vehicles are required to be stopped at check-posts for the purpose of verification as to whether they are carrying essential commodities or not. Vehicles remain stopped for a long time, thereby causing continuous emission of smoke and contributing to air pollution.”

The MCD, in its application said, “The removal of these exemptions would not only restore parity but also reinforce the intent of the ECC as a mechanism to promote environmental accountability and mitigate the harmful effects of vehicular emissions.”

The civic body also questioned the rationale of exempting unladen vehicles entering Delhi as they typically “exit the city with freight, contributing to pollution similar to laden vehicles”.

The MCD presented various studies to the court that underscored electronic toll collection (ETC) methods to be effective only when there is no manual toll collection system. As ECC is levied by contractors employed by MCD, the possibility of heavy bribes being paid by vehicle owners was also another possibility arising from manual ECC collection.

The ECC is collected via RFID and, after manual verification, the amount used to be refunded to vehicles found with essential commodities. MCD told the court that on a random analysis of the data for the period October 1, 2023, to September 30, 2024, the average amount refunded on daily basis added upto ₹24 lakh.