Green tax

Context: The Union Minister for Road Transport and Highways has approved a proposal to levy a “Green Tax” on old vehicles which are polluting the environment.

• The proposal will now go to the states for consultation before it is formally notified.
• The main principles to be followed while levying the Green Tax are :
• Transport vehicles older than 8 years could be charged Green Tax at the time of renewal of fitness certificate, at the rate of 10 to 25 % of road tax;
• Personal vehicles to be charged Green Tax at the time of renewal of Registration Certification after 15 years;
• Public transport vehicles, such as city buses, to be charged lower Green tax;
• Higher Green tax (50% of 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;
• Vehicles used in farming, such as tractor, harvestor, tiller etc to be exempted;
• Revenue collected from the Green Tax to be kept in a separate account and used for tackling pollution, and for States to set up stateof-art facilities for emission monitoring.

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.
• 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.
• It is to be notified, and will come into effect from 1st April, 2022.

• 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.

https://pib.gov.in/PressReleasePage.aspx?PRID=1692228