The Union Minister for Road Transport and Highways Nitin Gadkari has approved a proposal to levy a ‘Green Tax’ or pollution tax for older vehicles which are polluting the environment.

The proposal is now sent to states for consultation before it is formally notified. According to the notification the main principles to be followed while levying the Green Tax are :

• Transport vehicles older than 8 years could be charged Green Tax at the time of renewal of fitness certificate, at the rate of 10-25 percent 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 will be charged lower Green tax
• A significantly higher Green tax (50% of road tax) will be levied on vehicles being registered in highly polluted cities
• Differential tax, depending on fuel (petrol/diesel) and type of vehicle
• Green vehicles like strong hybrids, electric vehicles and alternate fuelled vehicles using CNG, ethanol, LPG will be exempted
• Agricultural vehicles used in farming, such as tractor, harvester, tiller to be exempted
• The revenue generated from the Green Tax to 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 idea is to dissuade people from using vehicles which damage the environment and motivate them to switch to newer, less polluting vehicles. The green tax will help further reduce pollution level and will work on the principle of ‘polluter pays for pollution.’

In addition, the Road Transport ministry has also approved the policy of deregistration and scrapping of vehicles owned by government departments and PSUs, which are above 15-years in age. The mandate is to be notified and will come into effect from April 1, 2022.

According to MoRTH estimates commercial vehicles, which constitute about 5 percent of the total vehicle fleet, contribute about 65-70% of total vehicular pollution. The older fleet typically manufactured before the year 2000 constitute less than 1% of the total fleet but contributes around 15% of total vehicular pollution. These older vehicles pollute 10-25 times more than modern vehicles.