Transport Ministry approves ‘green tax’ on old vehicles older than 8 years

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The Centre is all set to impose a special tax on old vehicles.

The Centre is planning to impose a ‘green tax’ on vehicles older than 8 years in relation with air pollution. The proposal has been approved by Minister for Road Transport and Highways  Nitin Gadkari. The purpose of the special tax is to encourage people to replace obsolete, air – polluting vehicles with new ones.

The proposal has been sent to the states. The opinion of the States may also be taken into account in issuing the notification regarding the provision. Government vehicles older than 15 years will be recalled. This action will be implemented from April next year.

Green tax is levied at the rate of 10 to 25 per cent of the road tax. If the vehicle is found to be more than 8 years old at the time of fitness renewal, tax will be levied. Vehicles re-registered in areas with high air pollution may be taxed up to 50 per cent of the road tax.

The tax will vary or be waived depending on the fuel used in the vehicle. Vehicles that use fuels such as LPG and ethanol, as well as electric and hybrid vehicles, may be exempt from tax. Vehicles used for agriculture will also be exempted from tax.

Green tax will be levied on private vehicles only after 15 years. There are indications that lower green tax will be levied on passenger buses.

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