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Transport ministry approves proposal for Green Tax on old vehicles

Transport vehicles older than eight years could be taxed at the rate of 10 percent to 25 percent of road tax, at the time of renewal of fitness certificate.

January 25, 2021 / 09:16 PM IST
air pollution

air pollution

The Union Ministry of Road Transport and Highways (MoRTH) on January 25 approved a proposal for Green Tax on old vehicles.

Under the new norms, the transport vehicles which are older than eight years could be taxed at the rate of 10-25 percent of road tax. These taxes will be imposed at the time of renewal of fitness certificate.

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Among other things, the MoRTH stated that a higher green tax of 50 percent will be imposed on vehicles being registered in highly polluted cities. The ministry also mentioned that depending on fuel and type of vehicle, a differential tax would be applicable.

Meanwhile, personal vehicles to be charged green tax after 15 years and public transport vehicles, such as city buses, to be charged a lower green tax.


However, the government exempted vehicles used for farming, such as tractors, harvesters and tillers. Also, vehicles like strong hybrids, electric vehicles and those using alternative fuels like CNG, ethanol and LPG will be exempted from green tax.

Citing the benefits  of the green tax, the MoRTH said in its release that it would dissuade people from using vehicles which damage the environment; motivate people to switch to newer, less polluting vehicles and will reduce the pollution level, and make the polluter pay for pollution.

"It is estimated that commercial vehicles, which constitute about 5% of the total vehicle fleet , contribute about 65-70% of total vehicular pollution. The older fleet, typically manufactured before the year 2000 constitute less that 1 % of the total fleet but contributes around 15% of total vehicular pollution. These older vehicles pollute 10-25 times more than modern vehicles," the release said. 
Moneycontrol News

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