Indian Government approves Green tax proposal for old vehicles

Transport vehicles older than eight years could be charged green tax, at the rate of 10-25 % of road tax, at the time of renewal of fitness certificate. Personal vehicles will also be charged green tax at the time of renewal of registration certification after 15 years.

By:January 26, 2021 9:01 AM

Older vehicles may attract a green tax if the road transport minister Nitin Gadkari has his way. According to an official statement, issued Monday, the minister 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,” it said.

As per the proposal, transport vehicles older than eight years could be charged green tax, at the rate of 10-25 % of road tax, at the time of renewal of fitness certificate. Personal vehicles will also be charged green tax at the time of renewal of registration certification after 15 years. The ministry, however, did not share the percentage of road tax to be levied on personal vehicles as green tax.

“Public transport vehicles, such as city buses, to be charged lower; while higher green tax(50%of the road tax) will be levied on vehicles being registered in highly polluted cities,” it said. Depending on the fuel and type of vehicle, the tax rate will be different.

Exemption will be given to vehicles like strong hybrids, electric vehicles and alternate fuels like CNG, ethanol, LPG, etc., as well as vehicles used in farming, such as tractor and tiller, etc. “Revenue collected from the green tax to 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 statement said.

Gadkari has also approved the policy of deregistration and scrapping of vehicles owned by government department and PSU, which are above 15years in age. It is to be notified and will come into effect from April 1, 2022

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