Green tax on vehicles older than 15 years

Green tax on vehicles older than 15 years

The Union Ministry for Road Transport and Highways has approved a proposal to levy a ‘green tax’ on old vehicles. Before we discuss the topic we have to know what is What is Green Tax? What is the Purpose of Green Tax? Let’s see.

Green tax also called pollution tax or environmental tax is the tax levied on goods that cause environmental pollution. The tax will discourage people from using vehicles that damage the environment. It will motivate them to switch to newer, less polluting vehicles and reduce the overall pollution level and make the polluter pay for it.

Key-Finding of the Report

(i) The ministry of road transport and highways has revealed that over four crore vehicles older than 15 years are plying on roads across India, which will come under the green tax, with Karnataka topping the chart with 70 lakh such old vehicles.

(ii) The list, published by the ministry, doesn't include details of Andhra Pradesh, Madhya Pradesh, Telangana and Lakshadweep, as their records were not available

(iii) The Green tax will be applied to the vehicles in the following categories:

• Transport vehicles older than 8 years to be charged at the time of renewal of fitness certificate at the rate of 10-25% 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 tax.
• Higher Green Tax of up to 50% of road tax for vehicles being registered in highly polluted cities like Delhi-NCR.
• Differential tax depending on fuel (petrol/diesel) and type of vehicle.

(iv) Strong hybrids, EVs, and vehicles that run on alternative fuels such as CNG, LPG, and ethanol and Vehicles used in farming such as tractors, harvesters, and tillers will be exempted from the Green Tax proposal.

(v) Revenue collected from the green tax will be kept in a separate account. The amount will be used for tackling the problem of pollution. The tax will also be used by states to set up state-of-art facilities to monitor the emission.