Union minister for road transport and highways Nitin Gadkari on Monday approved a proposal to levy a “Green Tax” on vehicles older that are older than eight years at the time of renewal of fitness certificate. The proposal will be sent to states and Union territories for their comments before being formally notified.
Under the new norms, the transport vehicles which are older than eight years could be taxed at the rate of 10-25 per cent of road tax.
Among other things, the MoRTH stated that a higher green tax of 50 per cent will be imposed on vehicles being registered in highly polluted cities. The ministry also mentioned that depending on fuel and type of vehicle, a differential tax would be applicable.
Meanwhile, personal vehicles to be charged green tax after 15 years and public transport vehicles, such as city buses, to be charged a lower green tax.
However, the government exempted vehicles used for farming, such as tractors, harvesters and tillers. Also, vehicles like strong hybrids, electric vehicles and those using alternative fuels like CNG, ethanol and LPG will be exempted from green tax.
The benefits of the “Green Tax” could be:
- To dissuade people from using vehicles which damage the environment
- To motivate people to switch to newer, less polluting vehicles
- Green tax will reduce the pollution level, and make the polluter pay for pollution.
It is estimated that commercial vehicles, which constitute about 5% of the total vehicle fleet , contribute about 65-70% of total vehicular pollution. The older fleet, typically manufactured before the year 2000 constitutes less than 1 % of the total fleet but contributes around 15% of total vehicular pollution. These older vehicles pollute 10-25 times more than modern vehicles, the government said.
Along with that, the minister also approved the policy of deregistration and scrapping of vehicles owned by government department and PSU, which are above 15 years in age. Prasad also said that it would come into effect from 1st April, 2022.