Transport Ministry approves proposal to levy ‘Green Tax’ on older vehicles

Union Minister for Road Transport and Highways Nitin Gadkari approved a proposal on January 25 to levy a ‘Green Tax’ on eight-year-old vehicles, in a bid to control rising levels of pollution in the country.

According to the proposal, transport vehicles older than eight years could be charged Green Tax at the time of renewal of fitness certificate, at the rate of 10 to 25 % of road tax, while personal vehicles to be charged Green Tax at the time of renewal of registration certification after 15 years.

A higher green tax of 50 percent will be levied on vehicles registered in highly polluted cities. There is a difference in tax levy depending on fuel and type of vehicle.

Vehicles like strong hybrids, electric vehicles and alternate fuels like CNG, ethanol, LPG, etc. to be exempted. Vehicles used in farming, such as tractors, harvester, tiller, etc. to be exempted from the green tax. Public transport vehicles, such as city buses, will be charged a lower Green tax.

 The ministry said the proposal will go to the states for consultation before it is formally notified.

Likely benefits of Green Tax:

• Will dissuade use of vehicles that damage the environment
• Will motivate switch to newer, less polluting vehicles
• Will reduce pollution level, make the polluter pay