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The Union Minister for Road Transport and Highways Sh. Nitin Gadkari has approved a proposal to levy a “Green Tax” on old vehicles which are polluting the environment

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 to 25 % 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, to be charged lower Green tax;
• Higher Green tax (50% of Road Tax) for vehicles being 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;
• Vehicles used in farming, such as tractor, harvestor, tiller etc to be exempted;
• Revenue collected from the Green Tax to be kept in a separate account and used for tackling pollution, and for States to set up stateof-art facilities for emission monitoring

Why was it needed?

•  Discourages Pollution-Causing Activities: By levying a duty, it is like a fine or punishment that either the seller or buyer or both have to bear for indulging into pollution-causing activities.
•  Encourages “Greener” Projects: Since the duty will make these products more expensive, it encourages other industries, which follow “Green” production practices, to compete and get an edge.
•  Collect Funds for Environmental Initiatives: Every country is spending billions of dollars on initiatives that can help in curbing the pollution in future. From forestation projects to river cleaning initiatives, all of these cost in millions and billions to the exchequer. The funds collected from this tax can be used to fund these initiatives making them financially viable.

Scrapping old vehicles

• India has been working on a scrappage policy for years that could, on the one hand, give a boost to the automobile industry and related businesses by stimulating demand, and lead to recovery of steel, aluminium, plastic and so on for recycling, on the other.
• Newer vehicles conforming to stricter emissions and fuel efficiency standards are more environment-friendly, and have modern safety features.
• In 2016, India notified the Corporate Average Fuel Economy (CAFE) Standard for passenger vehicles to boost efficiency.
  

Source: The Hindu