Image for representation.(Reuters)
Image for representation.(Reuters)

Soon, Centre to impose 'green tax' on older vehicles

  • The government has also proposed higher tax (50 per cent of the road tax) for vehicles registered in highly polluted cities.
By HT Correspondent | Edited by Sparshita Saxena
UPDATED ON JAN 25, 2021 07:13 PM IST

Union minister for road transport and highways Nitin Gadkari on Monday approved a proposal to levy a “Green Tax” on vehicles older than eight years at the time of renewal of fitness certificate. The proposal will be sent to states and Union territories for their comments before being formally notified.

The revenue collected through the tax will be used for tackling pollution, the transport ministry said in a statement.

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

The main principles to be followed while levying the 'green tax' includes; 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 the road tax, personal vehicles to be charged 'green tax' at the time of renewal of Registration Certification (RC) after 15 years while public transport vehicles, such as city buses, to be charged lower.

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The government has also proposed higher tax (50 per cent of the road tax) for vehicles 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,” the ministry noted.

Vehicles used in farming, such as tractor, harvester, tiller etc., will also be exempted. The revenue collected from the 'green tax' will 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 ministry stated.

The ministry of road transport and highways, in its long-pending draft vehicle scrappage policy, also stated it will include a waiver in registration fee and reduced road tax by states for vehicles purchased against scrapping certificates by scrapping old vehicles in an environment friendly and scientific manner.

The features of the draft policy were listed and discussed by the ministry at the 40th meeting of the transport development council, chaired by Gadkari on Tuesday.

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