Green Tax on 15-years-old vehicles

Those using cars and motorcycles which are more than 15 years-old will soon have to pay a Green Tax.

The Ministry of Road Transport and Highways has approved a proposal to levy Green Tax on old vehicles that are seen polluting the environment. The aim of the proposal is to dissuade motorists from driving old vehicles that cause pollution and to encourage them to switch to newer models. The proposal which was approved by Union Minister for Road Transport and Highways Nitin Gadkari will now go to the States for consultation before it gets formally notified.

Through the move, the Centre is looking at motivating vehicle owners to switch to newer and less polluting vehicles and with the proposed tax, to reduce pollution levels by adopting the concept of the polluter having to pay for pollution. According to the proposal, personal vehicles will be charged Green Tax at the time of renewal of Registration Certification after 15 years while transport vehicles older than eight years could be charged at the time of renewal of fitness certificate, at the rate of 10 to 25 per cent of road tax.

“Public transport vehicles, such as city buses, will be charged lower Green Tax. There will be higher Green tax (50 per cent of Road Tax) for vehicles



being registered in highly polluted cities. The tax will be different depending on fuel (petrol/ diesel) and type of vehicle,” the Ministry said in the proposal.

However, vehicles like strong hybrids, electric vehicles and alternate fuels like CNG, ethanol and LPG will be exempted. Exemption is also given to vehicles used in farming, such as tractor, harvester and tiller.

The Ministry said commercial vehicles, which constitute about five per cent of the total vehicles, contribute about 65-70 per cent of total vehicular pollution. The older fleet, manufactured before the year 2000 constitute less than one per cent of the total fleet but contributes around 15 per cent of total vehicular pollution. These older vehicles pollute 10 to 25 times more than modern vehicles, it pointed out.

The revenue collected from the Green Tax would be kept in a separate account and used for tackling pollution, and for States to set up state-of-art facilities for emission monitoring.

Meanwhile, the Ministry also approved the policy of deregistration and scrapping of vehicles, which are above 15 years in age, owned by government departments and PSUs, and will come into effect from April 1.