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Akash
Lawyer Files Plea on Maruti Suzuki To Refund Subsidies Earned on SHVS Cars
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Akash
Lawyer Files Plea on Maruti Suzuki: Refund Subsidies Earned on SHVS Cars
- Thread Starter Akash1886
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Absolutely right! However, Maruti can point out that it is the Government which allowed the subsidy based on features and tests carried out by Government's own agency. Maruti can also seek to get the subsidy amount back from customers of SHVS.
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#3
W.r.t the customers, I believe none of the customers were informed about the core policy framework done by the agencies either by MSIL or it's dealers. So asking back the subsidy amount from customers isn't the right thing. As for the Govt. Framework involved, the question is how transparently did MSIL follow the rules and adhered to the policies for claiming the designated subsidy. If the technology isn't sanctioned to get subsidy then why even after knowing that did MSIL claim the same? I am sure MSIL was informed of the facts beforehand.
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Akash
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Akash
I believe subsidy in the name of SHVS was not ethical by Maruti and they should return it. Asking from customers doesn't make any sense.
I am looking at it from Maruti's legal point of view, not ethical or sensible pov. Maruti can take the aforementioned stance and win the case legally. Adding customers to the mix will put brakes on any Govt claim of refund from Maruti.
Why is Maruti expected to have high moral grounds and principles when we don't have the same. Many car buyers knew the fact that the mild Hybrid is a marketing gimmick and more of a start stop technology, but still went for it due to the price advantage.
Why is the company held responsible for a badly crafted rule by the government?
Every time the government changes taxes on a segment, it's the company and the customers who purchase the cars who come out as losers. When the GST for a product is reduced, does the government offer the people who purchased it before the reduction the money back? It has not happened in most of the cases.
Maruti, on the other hand is one of the few companies which returned their customer's money when they reduced the price for the S Cross.
I agree it's unethical, but taking advantage of a rule is business and that's what Maruti is here for.
If we are talking about ethics, we all know why the 4m rule was made and the subsidies were given for vehicles with smaller engines. The idea was to give subsides for small hatchbacks and cheaper cars. Does getting a subsidy for a compact Sedan or a compact SUV make any sense in that case? Tomorrow, if they change the rule and remove the subsidies for this category, would you expect yourself or your car's manufacturer to pay more to the government what they had got as a subsidy?
Though I am not a fan of the cars Maruti manufactures , I still find their achievement quite great as a company in India. They have managed to build their brand based on the trust, and no matter how much we deny, they still are No. 1 at what they do.
The VW dieselgate scandal is far more unethical than this and still we did not ask for any compensation from the company and still are buying their products. If that was let go with a mere change in the mapping of the ECU, I don't see any standing for this case.
Why is the company held responsible for a badly crafted rule by the government?
Every time the government changes taxes on a segment, it's the company and the customers who purchase the cars who come out as losers. When the GST for a product is reduced, does the government offer the people who purchased it before the reduction the money back? It has not happened in most of the cases.
Maruti, on the other hand is one of the few companies which returned their customer's money when they reduced the price for the S Cross.
I agree it's unethical, but taking advantage of a rule is business and that's what Maruti is here for.
If we are talking about ethics, we all know why the 4m rule was made and the subsidies were given for vehicles with smaller engines. The idea was to give subsides for small hatchbacks and cheaper cars. Does getting a subsidy for a compact Sedan or a compact SUV make any sense in that case? Tomorrow, if they change the rule and remove the subsidies for this category, would you expect yourself or your car's manufacturer to pay more to the government what they had got as a subsidy?
Though I am not a fan of the cars Maruti manufactures , I still find their achievement quite great as a company in India. They have managed to build their brand based on the trust, and no matter how much we deny, they still are No. 1 at what they do.
The VW dieselgate scandal is far more unethical than this and still we did not ask for any compensation from the company and still are buying their products. If that was let go with a mere change in the mapping of the ECU, I don't see any standing for this case.
Your points are true to some extent but 4m and this cannot be directly compared. 4m car rule is for the purpose of reducing congestion on the roads and they do by a great extent. Electric/Hybrid subsidy was to boost EV/Hybrid vehicles but we know how much SHVS is EV/Hybrid. Maruti just played with a loophole in the Government rule.
Scorpio too using mild hybrid was not using the subsidy. Maruti I suspect might have got the certificate for SHVS by bribing dome agency person otherwise they should not have got the subsidy under the FAME rule. Mahindra didn't claim it for Scorpio. Consider it like this, ministers do scams by getting legal documents. Fo we blame just the officials involved or the ministers too? I think Maruti should be penalized.
Scorpio too using mild hybrid was not using the subsidy. Maruti I suspect might have got the certificate for SHVS by bribing dome agency person otherwise they should not have got the subsidy under the FAME rule. Mahindra didn't claim it for Scorpio. Consider it like this, ministers do scams by getting legal documents. Fo we blame just the officials involved or the ministers too? I think Maruti should be penalized.
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Mahindra has been on the forefront in by passing the law. If you remember them placing a low hanging "stone guard" to get certification for lower ground clearance (https://www.team-bhp.com/news/mahindra-xuv500-loses-ground-clearance-lower-excise), to save taxes. Mahindra did not opt out of the scheme and the Scorpio was listed one of the cars to lose benifit due to the scheme.
After 73,633 units sold, subsidy to mild hybrids under FAME scheme withdrawn
I would have called it unethical, if the company was keeping the profits to itself. In turn, here it has been passed on to the buyer, which was the idea in the first place. The SHVS did regenerate braking energy, used an extra battery for power assist, over and above adding the start stop technology. Many users also reported a little higher fuel efficiency due to the technology. It satisfied the norms put down by the government, then why should they not claim for the scheme.
This is just like citizens using the LPG subsidy even though they may not need it. One can volunteer to opt out of the scheme, as Mahindra may have done, but it does not become illegal to take the scheme either if you satisfy the norms government has put forward for it. Why should the a company pay for the inefficiency of a government body to put down rules?
After 73,633 units sold, subsidy to mild hybrids under FAME scheme withdrawn
I would have called it unethical, if the company was keeping the profits to itself. In turn, here it has been passed on to the buyer, which was the idea in the first place. The SHVS did regenerate braking energy, used an extra battery for power assist, over and above adding the start stop technology. Many users also reported a little higher fuel efficiency due to the technology. It satisfied the norms put down by the government, then why should they not claim for the scheme.
This is just like citizens using the LPG subsidy even though they may not need it. One can volunteer to opt out of the scheme, as Mahindra may have done, but it does not become illegal to take the scheme either if you satisfy the norms government has put forward for it. Why should the a company pay for the inefficiency of a government body to put down rules?
It can't be penalized. It followed the law to get the subsidy. Government should have defined the term 'Mild Hybrid' properly.Every business will try to maximize stakeholder value so no point blaming Maruti. Maruti may be wrong morally, but the lawyer's plea stands no chance of wining from legal point of view. In fact the only reason the plea got admitted is because he filed the plea with NGT.
Maruti simply cannot be made liable for Government's shortsightedness. When Government is unable to distinguish between a proper hybrid/EV technology from the SHVS joke, the manufacturer cannot be simply made to pay for exploiting this loophole. The PIL itself does not have any grounds to be honest. If Maruti is infact made to repay, I think this will send wrong messages to all corporates that they can be made to repay the subsidy that they had enjoyed retrospectively just because the subsidy is no longer available and will impact future investments for sure.
First off, the case is never going to reach the stage where Maruti has to pay back the subsidy, as the plea is liable to be dismissed when it is shifted from NGT to court. Second, getting back the subsidy from customer is definitely legally valid option, but it can only be used if Maruti ignores the negative publicity that will be created by using this option. It is highly unlikely that Maruti will exercise this option.
If we do presume -as an academic exercise- that Maruti does go down that route, there is no prior need to explain the pricing breakup anywhere in documentation to customer when selling anything. Maruti can put up the pricing breakup based on cost + margin after the fact.
If we do presume -as an academic exercise- that Maruti does go down that route, there is no prior need to explain the pricing breakup anywhere in documentation to customer when selling anything. Maruti can put up the pricing breakup based on cost + margin after the fact.
Even though, I don't think that the case will manage to get to a conclusion and would be rejected in the initial hearings itself. Even if the case does not favour Maruti, I don't think they would manage to get the amount from the customer. It would be quite a situation if the customers are asked to pay back the subsidy.
For example let's take a situation where a person who has purchased the car with SHVS, and then he sells it to a second person after a year. In this situation, he has in turn passed on the subsidy to the next buyer, as the depreciation would be based on the on road value of the car. Now, would the first owner or the second owner be liable to pay back the amount? Also, the second buyer can be totally unaware about the subsidy, as its not available now. How can he be made liable to pay for a subsidy that someone else has taken?
Second case: Insurance premium: When the subsidy amount is returned, the value of the car increases. This should make the insured value, value of road tax in the next bracket. Would this be considered?
A lot of factors would come into place if the customers are asked to pay for an item. And I think it is also illegal to change the prices after the deal is made.
For example let's take a situation where a person who has purchased the car with SHVS, and then he sells it to a second person after a year. In this situation, he has in turn passed on the subsidy to the next buyer, as the depreciation would be based on the on road value of the car. Now, would the first owner or the second owner be liable to pay back the amount? Also, the second buyer can be totally unaware about the subsidy, as its not available now. How can he be made liable to pay for a subsidy that someone else has taken?
Second case: Insurance premium: When the subsidy amount is returned, the value of the car increases. This should make the insured value, value of road tax in the next bracket. Would this be considered?
A lot of factors would come into place if the customers are asked to pay for an item. And I think it is also illegal to change the prices after the deal is made.
Maruti schemed to get yet another Govt policy tailor made to its benefit. It made sure the CIAZ got VFM pricing advantage. Without VFM pricing, compared to the City- Ciaz would have been finished off and declared a flop and Maruti could not enter premium segments. Today, people are not scared in buying a Ciaz since it is a hit "Model", but in early 2015 is Maruti did not get the SHVS gimmickry benefit the City would have killed the product and it would have been branded that Maruti can't sell in premium segments.
It was a strategy, no customer can be asked to pay. This is a belated attempt by competitors who had no answer to the benefit Maruti got from the so called FAME policy where CIAZ DIESEL and ERTIGA were more Polluting than most cars in the market but got Green benefits. This is how Govts and Corporates work together. Clearly Maruti has a lot of influence in the inner workings of bureaucrats and Politcos in the way it works.
Regarding Higher fuel efficiency, people who tested 0 to 100 Km of SHVS and Non SHVS variants report that SHVS variants are far slower in accelaration, i.e the Engines are running with a MAP increasing fuel efficiency, there is no other technical reason in the SHVS which was sold in India to give more fuel efficiency.
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