Green Tax to be imposed on Transport Vehicles that are 8 years old 


All vehicles older than 8 years related to transport will have to pay ‘green tax’. This can be 10 to 25% of the road tax.  The Union Road Transport and Highways Ministry has approved this proposal for prevention of pollution. States will be consulted before this proposal is notified. Vehicles running on hybrid, electric and alternative fuels such as CNG, ethanol and LPG will be exempted from this tax. The revenue from the green tax will be used to prevent pollution. Registration of all government vehicles older than 15 years will be canceled from April 1, 2022. They will be declared junk. Soon the notification of this will also be released. 

If this proposal is applicable, then a 15 year old car may have to pay 7,000 to 17,500 green tax (in Delhi). In other states, this amount may be slightly higher, as road tax is higher than Delhi in most states.

According to the ministry there will be many benefits from green tax. People will use less polluting vehicles. Demand for hybrid and electric vehicles will increase. The government will get additional revenue from trains. It is estimated that commercial vehicles account for 65-70% of vehicular pollution. The total number of these vehicles is about five percent.

The proposal is –

  • Green tax up to 10-25% at the time of renewal of fitness certificate on transport vehicles older than eight years.
  • Green tax will be levied at the time of renewal after 15 years of registration of private vehicles.
  • Public vehicles like city buses would fall under less green tax category
  • Green tax equal to 50% of the road tax is possible in more polluted cities.
  • Exemption for vehicles used in farming, such as road tractors, harvesters, tillers etc.