Government plans to impose green tax on vehicles older than eight years

(From Representative) Ahmedabad, Ta. Monday, January 25, 2021

The central government is planning to impose a green cess of 8 to 25 per cent of the road tax on vehicles older than eight years. Union Road Transport Minister Nitin Gadkari said he had given his approval for the matter. The environment in the country has been severely damaged.

Green cess is being considered to rectify the situation and prevent the spread of pollution through vehicles older than eight years. The proposal has been sent to every state in the country. The issue will be decided after the states submit their views on the matter.

Commercial vehicles are likely to be heavily taxed. There is an obligation to obtain a fitness certificate every year for a commercial vehicle. Private vehicles have to take a fitness certificate every 15 years.

In this case, the commercial vehicle is likely to bear the brunt of this tax. R.T.O. Is taxed at 6% of the basic price of the vehicle. Green cess ranging from 8% to 25% of this tax amount will be levied.

To give an example, if a commercial vehicle is new, its fitness certificate has to be obtained after two years. Under these circumstances, no green cess will be levied after one year. But if he goes to get a fitness certificate in the next year, he will have to deposit 600 to 800 in addition to the fitness certificate and 8 to 25 per cent of the road tax amount.

Road tax is 6% of the basic cost of a vehicle. However, after taking road tax from private vehicles, he has to go for 15 years to renew the fitness of his vehicle. In these circumstances it is not clear how the green cess will be taken from them along with the fitness certificate of private vehicles.

However, if the central government takes this decision, the market for old vehicles is likely to collapse. The demand for older vehicles is likely to decline from this year. On the other hand, the value of three year old vehicles may also increase. Companies that change vehicles can reap the benefits every three to four years after depreciation. They can get better value for their vehicles.