Govt to levy ‘green tax’ on vehicles older than 8 years
NEW DELHI: Union minister for road transport and highways Nitin Gadkari, on Monday signed off on a plan to levy a “Green Tax” on commercial vehicles older than eight years at the time of renewal of fitness certificate. The proposal will be sent to states and Union territories (Uts)for their comment before being taken up by the Union cabinet .
The revenue collected through the tax will be used for tackling pollution, the transport ministry said in a statement.
The minister also approved the policy of deregistration and scrapping of vehicles owned by government departments and state-owned companies that are at least 15 years old. This policy will be notified and come into effect from April 1 2022.
According to an official in the transport ministry who asked not to be named, the policy will be advisory in nature. “It may be noted that at least eight to nine states have already implemented this—imposed green tax or higher road tax in older vehicles. The decision taken today by the minister is basically an advisory to the states to levy higher road tax on older vehicles especially commercial vehicles. It will be up to the states to levy the road tax. We have also advised to increase the road tax especially in polluted cities,” a senior transport ministry official said.
In the Delhi-national Capital Region (NCR), private vehicles have registration limit of 10 years for diesel vehicles and 15 years for petrol vehicles. The new policy will be advised for other regions where regulations are not as strict, the person quoted above said.
“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 constitute less that 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 ministry said.
The plan being considered involves transport vehicles older than eight years being charged Green Tax at the time of renewal of fitness certificate, at the rate of 10 to 25 % of the road tax; personal vehicles being charged Green Tax at the time of renewal of Registration Certificate after 15 years; and public transport vehicles, such as city buses, to be charged a lower Green tax.
The government has also proposed higher Green tax (50% of the Road Tax) for vehicles being registered in highly polluted cities. “Differential tax, depending on fuel (petrol/diesel) and type of vehicle; Vehicles like strong hybrids, electric vehicles and alternate fuels like CNG, ethanol, LPG etc to be exempted,” the ministry said.
Vehicles used in farming, such as tractors and tillers will also be exempted from the Green Tax. The revenue collected from this levy will be kept in a separate account and used for tackling pollution, and for States to set up state of-art facilities for emission monitoring, the ministry said.
The ministry of road transport and highways also stated that it will include a waiver in registration fee and reduced road tax by states for vehicles purchased against scrapping certificates, issued for scrapping old vehicles in an environment friendly and scientific manner, HT reported on Sunday.
The ministry said the “Green Tax” would reduce “pollution levels, and make the polluter pay for pollution.”
“I feel it will increase costs for commercial vehicles eight years and older without leading to any scrappage. It is difficult to understand the rationale and basis of the 8-year cut-off without having any scientific method of maintenance and inspection system in place,” said SP Singh, senior fellow, Indian Foundation of Transport Research and Training.
“Merely increasing/ imposing green tax is not the way to check air pollution. More stringent PUC regime is more helpful... when diesel/ petrol vehicles are fed on BS6 quality fuel,” he said, adding that the “new proposal seems to be under pressure from the auto industry lobby.