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Driving an old vehicle! Know about 'Green Tax' and why you need to pay it

Union Minister for Road Transport and Highways, Nitin Gadkari, has approved a proposal for the government to levy a 'Green Tax' on old vehicles.

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The Ministry for Road Transport and Highways in India will now levy a 'Green Tax' on all old vehicles being used for transportation. The idea is to clean up the environment by phasing out unfit and polluting vehicles. The revenue collected through the green tax will be used to tackle pollution. 

The Union Minister for Road Transport and Highways, Nitin Gadkari, has approved a proposal for the government to levy a 'Green Tax' on old vehicles which are polluting the environment. The proposal will now go to the states for consultation before it is formally notified.

Idea behind the decision

People are motivated to not use old vehicles, which cause more pollution.

People are encouraged to buy new and less polluting vehicles.

Cars which are over 15 years old and are owned by various government departments and PSUs will be de-registered and scrapped.

The scrappage policy for government vehicles will come into effect from April 1, 2022.

Details about Green Tax

According to the proposal, vehicles older than eight years could be charged green tax at the time of fitness certificate renewal.

The amount could be between 10% and 25% of the road tax.

In case of personal vehicles, green tax could be levied at the time of renewal of registration certificate after 15 years.

Green tax could go up to 50% of the road tax, when a vehicle is re-registered in highly polluted cities.

Public transport vehicles, such as city buses, to be charged lower Green tax.

Differential tax, depending on fuel (petrol/diesel) and type of vehicle.

Vehicles used in farming, such as tractor, harvester, tiller etc to be exempted.

It is reportedly 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 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.

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