Delhi: Union Min suggests revoking green tax

Union minister Nitin Gadkari questions the use of the environment compensation charge on commercial vehicles in Delhi, suggesting its discontinuation due to misuse.

Union road transport and highways minister Nitin Gadkari on Wednesday called for the discontinuation of the environment compensation charge (ECC) levied on commercial vehicles entering and exiting Delhi, questioning whether the funds collected were being utilised for their intended purpose of combating pollution.

Gadkari said he raised the issue in a meeting with the Municipal Corporation of Delhi (MCD), asking what contribution the civic body was making toward green initiatives despite collecting the levy. (ANI)

Speaking at an India Today event, Gadkari said he raised the issue in a meeting with the Municipal Corporation of Delhi (MCD), asking what contribution the civic body was making toward green initiatives despite collecting the levy.

“In a common meeting, I asked the corporation (MCD) what is your contribution is for green activities. (They said) no contribution… Why are you collecting the toll? They are telling me it is the Supreme Court’s decision, then I requested the Delhi chief minister to stop it immediately,” he said speaking at an India Today event.

First imposed by the Supreme Court in 2015, the ECC is a fee levied on commercial vehicles entering Delhi to First imposed by the Supreme Court in 2015, the ECC is a fee levied on commercial vehicles entering Delhi to mitigate air pollution. The charge, in addition to regular toll taxes, was aimed at discouraging polluting vehicles from entering the capital and funding initiatives to improve public transport and pedestrian infrastructure.

Gadkari indicated that when his ministry examined the funds, it found that despite the levy being collected, the money was not used for the intended purpose of improving air quality. He said MCD officials informed him the green fee was financially important for the civic body. In response, Gadkari suggested the Delhi government could provide ₹800-900 crore as aid-in-grants to the corporation instead of continuing the levy.

Referring to the legal basis of the tax, Gadkari said officials cited a Supreme Court order for its continuation. He added he had urged intervention so the court could reconsider the decision and provide relief to people facing difficulties because of the levy.

The minister’s remarks again raise questions over the utilisation of funds collected in the name of tackling pollution. The toll tax and ECC being levied on the Delhi border points have been under the scanner over the last year due to congestion and consequent air pollution from vehicular emissions at border points.

In October, the Supreme Court removed a decade-old exemption on commercial vehicles carrying essential commodities from paying ECC, directing all commercial vehicles to uniformly deposit the charge. The court found that its order granting exemption posed “genuine” difficulty.

When Gadkari urged the Delhi government in June to remove congestion-causing booths, MCD’s response was framed in fiscal terms. The corporation proposed alternatives: either an annual direct grant of approximately ₹900 crore or a 1% increase in transfer duty on property sales in Delhi. Without such compensation, MCD argued, removing toll plazas would cripple its finances.