BackNitin Gadkari approves proposal to slap green tax on old, polluting vehicles
Nitin Gadkari also approved the policy of deregistration and scrapping of vehicles owned by government departments, and public sector entitiesRevenue from the green tax will have to be kept in a separate account and used for tackling pollution
PremiumRoad transport and highways minister Nitin Gadkari on Monday approved a proposal to impose a green tax on some category of vehicles, setting the stage for phasing out old pollution-causing vehicles.
The proposal will be referred to the states for consultation before it is notified, an official statement said.
The minister also approved the policy of deregistration and scrapping of vehicles owned by government departments and public sector entities. Such vehicles will have to be more than 15 years old. The policy will come into effect from 1 April 2022. A broader vehicle scrapping policy is yet to be announced by the government.
According to the proposal, a green tax could be levied on transport or commercial vehicles older than eight years at the time of renewal of fitness certificate. The levy will have to be in the range of 10-25 % of the road tax. In case of personal vehicles, it could be charged at the time of renewal of registration certificate after 15 years.
“The Centre is providing broader guidelines for the states. It has to be ultimately implemented by them (states). Currently, some states such as Uttar Pradesh, Goa, Maharashtra levy such a tax," a senior government official told Mint.
Such a tax will dissuade consumers from using vehicles that cause pollution, by making the polluter pay. It will also prompt them to switch to newer, less-polluting vehicles such as electric vehicles.
The government has also proposed that public transport vehicles, such as city buses, will be charged lower green tax. There will be higher tax—50% of road tax—for vehicles being registered in highly polluted cities and differential tax, depending on fuel—petrol or diesel—and the type of vehicle.
Hybrid vehicles, electric vehicles and those running on cleaner alternative fuels such as CNG, ethanol and LPG are to be exempted.
Vehicles used in farming, such as tractors, harvesters, tillers will also be exempted.
Revenue from the green tax will have to be kept in a separate account and used for tackling pollution. States will also have to set up state-of-the-art facilities for emission monitoring by utilizing these funds.
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