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Transport Ministry approves green tax on vehicles over 8 years old

The proposal will go to the states for consultation before it is formally notified, an official statement said.

Union Minister for Road Transport and Highways Nitin Gadkari approved a proposal to levy green tax on old vehicles polluting the environment. The transport vehicles older than eight years could be levied tax at the rate of 10-25 percent of the road tax.

The proposal will go to the states for consultation before it is formally notified, an official statement said. 

The policy of deregistration and scrapping of vehicles older than 15 years, owned by public sector entities and government entities has also been approved by the minister.The policy is expected to come into effect from April 1,2022.

According to the proposal, green tax will be imposed on transport vehicles at the rate id 10-25 percent of the road tax at the time of renewal of the fitness certificate. Such vehicles will have to be older than eight years. The revenue generated from the green tax will be used for tackling pollution, for setting up emission monitoring facilities, said an official statement.

The commercial vehicles constituting 5 percent of the total vehicle fleet, is estimated to contribute 65-70 percent of total vehicular pollution. Less than 1 percent of the total fleet constituting the older fleet, manufactured before 2000, contributes to 15 percent of total vehicular pollution, added an official statement.

The personal vehicles will also be levied the same charge at the time of renewal of registration after 15 years. On the other hand, public transport vehicles such as city buses will be charged a lower green tax. However, in highly polluted cities, a higher green tax will be charged from registered vehicles, depending on the fuel variant and type of vehicle.

Electric vehicles, hybrids and alternate fuels such as ethanol, compressed natural gas and liquified petroleum gas will be exempted from the tax. The farm vehicles including harvesters, tractors, tillers among others will also be exempted.

Also Read: Arvind Kejriwal says Delhi managed to fight Covid-19 with help of health infrastructure built over last five years

The idea behind the proposal is to clean up the environment by phasing out unfit and polluting vehicles. The green tax will dissuade people from not using old vehicles, which cause more pollution and motivate them to buy new, less polluting vehicles. 

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