The Union Minister for Road Transport and Highways Nitin Gadkari on Monday said his department has approved a proposal to levy "Green Tax" on old vehicles that are polluting the environment.
He said that the proposal will now go to the states for consultation before it is formally notified.
According to the proposal, transport vehicles older than eight years could be charged Green Tax at the time of renewal of fitness certificate, at the rate of 10 to 25 per cent of road tax, while personal vehicles will be charged Green Tax at the time of renewal of registration certification after 15 years.
The new proposal also said that public transport vehicles, such as city buses, will be charged lower Green Tax.
It further said that the vehicles being registered in highly-polluted cities will have to pay higher green tax (50 per cent of road tax) depending upon the fuel type (petrol or diesel) and the type of vehicle.
The proposal further said that vehicles such as strong hybrids, electric vehicles and alternate fuels such as CNG, ethanol, LPG etc and vehicles used in farming, such as tractor, tiller etc, must be exempt from Green Tax.
The proposal further said that revenue collected from Green Tax will be kept in a separate account and used for tackling pollution, and for states to set up facilities for emission monitoring.
The ministry said that the aim of the new proposal is to dissuade people from using vehicles which damage the environment, to motivate people to switch to newer, less-polluting vehicles and reduce pollution levels by making the polluter pay for pollution.
The minister also approved the policy of deregistration and scrapping of vehicles owned by government department and PSUs, which are more than 15 years in age.
It will be notified and come into effect from April 1 next year.
The ministry said that it is estimated that commercial vehicles, which constitute about 5 per cent of the total vehicle fleet, contribute about 65-70 per cent to total vehicular pollution.
It also said that the older fleet, typically manufactured before the year 2000, constitutes less than 1 per cent of the total fleet but contributes around 15 per cent of total vehicular pollution.
"These older vehicles pollute 10-25 times more than modern vehicles," the statement added.