Green tax: Own an old vehicle? You may have to pay extra tax

Keeping old vehicles would be more taxing as the Centre approved draft guidelines to levy a green tax on such vehicles.

The draft guidelines allow states to levy green taxes on old vehicles. The charges will be more for vehicles registered in more polluted cities, said a statement from the Transport Ministry.

Introduction of green tax mainly to discourage the public from using old and polluting vehicles.

Union Minister for Road Transport and Highways Nitin Gadkari has approved a proposal 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, the statement said.

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, while personal vehicles could be charged at the time of renewal of registration certification after 15 years, the statement said.

Public transport vehicles, such as city buses, to be charged lower green tax while higher green tax (50% of toad tax) for vehicles being registered in highly polluted cities.

Differential tax, depending on fuel (petrol/diesel) and type of vehicle. Green fuel vehicles like strong hybrids, electric vehicles and alternate fuels like CNG, ethanol, LPG to be exempted.

Vehicles used in farming including tractor, harvester, tiller to be exempted, said the statement.

Revenue collected 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 Minister also approved the policy of deregistration and scrapping of vehicles owned by Government department and PSU, which are above 15 years in age. It is to be notified and will come into effect from 1st April 2022.

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, 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, the statement said.