New Delhi – India’s Ministry of Road Transport and Highways (MORTH) has announced it is to levy a pollution tax or ‘Green Tax’ on older petrol and diesel vehicles. The aim of the ‘Green Tax’ is to encourage people to stop using older vehicles that are more likely to pollute the environment and to switch to newer vehicles to reduce pollution and improve air quality.

For commercial vehicles older than eight years, a levy is to be charged at the time of the annual vehicle renewal fitness certificate (FC) and at a rate equivalent of between 10 and 25% of the road tax charged - depending on vehicle type, age, operating location, and emissions standard. Public transport vehicles, for instance, like city buses are to be charged at a lower tax rate, but this will also vary according to city air quality levels, the Ministry said in a statement - cities like Delhi, for instance, air pollution levels have been recorded as being off the scale many times in recent years. On-highway vehicles that operate hybrid or full electric drivelines or are powered using alternate fuels such as CNG, LPG and ethanol are to qualify for exemption. (For personal vehicles (i.e., cars, three wheelers and motorbikes), it is proposed these are to be charged a green tax levy when the vehicle reaches 15 years or older).