CSE calls for Rs 1.62 lakh extra tax on big diesel cars

The Centre for Science and Environment today demanded an additional duty of up to Rs 1.62 lakh on big diesel cars to prevent the misuse of subsidised fuel for luxury.

While blaming the government for its inaction over the issue, the NGO also hit out at the auto industry body Society of Indian Automobile Manufacturers (SIAM) and vehicle makers for "propagating false information" about diesel technology and amount of the fuel consumed by cars and personal vehicles.

"Any car is a luxury. A car owner should not enjoy any subsidy. There should be additional duty on diesel cars to equalise the subsidy benefits given on diesel and petrol," CSE Executive Director (Research and Advocacy) and Head (Air Pollution and Urban Mobility) Anumita Roychowdhury said.

She said the recommendations of the Planning Commission's Kirit Parikh Committee of an additional Rs 81,000 equaliser excise tax for small cars with engines of less than 1,400 cc should be implemented in the Budget for 2012-13.

"This amount should be doubled for bigger cars for equitable sharing of burden," she added. Urging to implement the proposal, CSE has already submitted a memorandum to the Finance Ministry, she said.

Stressing that consumers should be given equal excise benefit, Roychowdhury said: "Government is responsible for taxation and pricing. It has to equalise the prices. If it can not correct it immediately, then additional policy steps must be taken to prevent misuse of diesel for luxury.

"With each litre of petrol replaced by diesel to run a car, the excise earnings of the government drop seven times. The effect of increased use of diesel in cars is so dramatic that the excise earnings from both diesel and petrol has nearly equalled."

Commenting on the findings of a joint report by SIAM and 12th Planning Working Group on Petroleum Sector (WGP), Roychowdhury said: "Their data is showing just 8.8 per cent of total diesel consumption is by cars, jeeps, MUVs, taxis and three-wheelers.

"However, the same stands at 15 per cent in the government's Petroleum Planning and Analysis Cell (PPAC), which was cited in the Planning Commission's Kirit Parikh Committee Report of 2010." Besides, 12.5 per cent consumption is showed in the 'others category' by SIAM-WGP report.

"What are these substantial uses of diesel that do not get covered by industry, power, agriculture or transport and is outside the policy purview of the government? By using this category, the relative share of the critical sectors of economy -- transport, industry and power -- have been reduced significantly," Roychowdhury blamed.

However, when contacted, a SIAM official said the industry body stands by its own data. Last week, SIAM had said that out of a total of 61.68 million tonnes of diesel consumed in India across various sectors during 2010-11, diesel personal cars consumed only 1.03 per cent, while for diesel taxi segment it was at 1.82 per cent.

Jeeps used for personal purpose accounted for 0.53 per cent and the same category of vehicle used for commercial purpose consumed 3.44 per cent, it had said. According to CSE researchers, if the new diesel car fleet were to pay the same excise as that of petrol cars while purchasing the fuel, the potential excise revenue can be Rs 1,00,000 crore from the lifetime fuel use of the new car fleet to be sold between 2009 and 2015, she claimed.

At present, the excise duty on every litre of petrol stands at Rs 14.78, while the same is just Rs 2.06 for diesel.