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Green Tax for a Greener Society

 

Recently, Tesla has launched their electric cars in the Indian market. Though there has been a mixed reaction by the Indian consumers because of the price of the cars and lack of charging facilities. It is expected that Tesla will find it difficult to compete with the Diesel and Petrol variants as well as Indian electric car manufacturers. Talking about electric cars in order to curb environmental pollution and encourage people to switch to eco-friendly transportation mode, the Union Ministry for Road Transport and Highways of India has approved a proposal to levy a ‘Green Tax’ on old vehicles. Experts argues that, charging taxes on vehicles that cause environmental pollution will decrease environmental loss in a cost effective manner by encouraging behavioural changes among people.

The Green Tax can be seen as a measure to strengthen India’s commitment to the Paris Agreement of 2015. As per the agreement India has targeted to reducing the emissions intensity of its GDP by 33-35% by 2030 over 2005 levels.  Let’s first see the salient features of the proposed tax.

The Green Tax is expected to come into practice from April 1, 2022. According to the proposal, personal vehicles will be charged a tax at the time renewal of Registration Certification after 15 years. The tax may differ based on the type of vehicle and fuel used in it like petrol/diesel. In order to ensure proper implementation of the policy, before formal notification, this proposal will also go to the States for consultation. Green Tax will include levy of 10-25% of road tax on transport vehicles older than eight years at the time of renewal of fitness certificate. The proposed green tax also comprises a steeper penalty of up to 50% of road tax for older vehicles registered in some of the highly polluted cities in the country. Revenue generated from this tax will be used for tackling pollution and will be kept in a separate account. A state-of-art facilities for emission monitoring will also be set up in states. Interested about New Commission for Air Quality management in Delhi NCR? Read here.

Significance of the proposed Green Tax

The tax will help to reduce air pollution level and ensures the polluter pay for pollution. The tax will encourage people to switch to newer and less polluting vehicles such as electric cars and bike or to use public transportation. It is expected that such a move will also help in reducing traffic from the roads. The proposed tax will also discourage people from using older vehicles with higher emissions which damages environment.

Exemptions

Just like any other taxes the Government of India has also made certain exceptions to the law. Vehicles such as strong hybrids, electric vehicles and alternate fuels (CNG, LPG, ethanol etc.) are exempted under the law.  India being an agricultural society having large number of small and marginal farmers, the Government has also exempted farming vehicles like tractor, harvester, tiller, etc.

Conclusion

Green tax is a sign that policy makers is now understanding the seriousness of rising environment pollution. Though it is just a beginning we need more such efforts to curb the menace of rising air pollution. India being on the largest greenhouse gas emitter, a responsible act just like the proposed Green Tax is a welcome step. Along with this people awareness is also very important to understand the threat of environmental degradation and display responsible behaviour.

 

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