• Recently, the Centre announced its plans to impose a “green tax” on older vehicles in a move to disincentive the use of polluting vehicles and to curb pollution in the country.


  • The Ministry of Road Transport and Highways will levy a green tax on transport vehicles older than eight years at the time of renewal of fitness certificate at the rate of 10% to 25% of road tax.
  • The revenue collected through the green tax will be kept in a different account and will only be utilised for tackling pollution.
  • Exemptions:
    • Vehicles like strong hybrids, electric vehicles and those running on alternate fuels like CNG, ethanol and LPG and vehicles used in farming, such as tractor, harvesters and tillers will be exempted.
  • Idea behind the decision
    • People are motivated to not use old vehicles, which cause more pollution.
    • People are encouraged to buy new and less polluting vehicles.
    • Cars which are over 15 years old and are owned by various government departments and PSUs will be de-registered and scrapped.
    • The scrappage policy for government vehicles will come into effect from April 1, 2022.

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