25% green tax on diesel cars ?

Discussion in 'Indian Automotive Scene' started by Dhillon, Nov 27, 2012.

  1. Dhillon

    Dhillon Administrator Staff Member

    Apr 21, 2011
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    The Supreme Court on Monday sought the Centre's response to a radical plea for collection of 25% of the cost of a diesel car or SUV sold in the National Capital Region as green tax at the time of its purchase to deter people from buying more polluting personal vehicles and help fight the growing levels of pollution in Delhi.

    The court also sought the Union government's response to another suggestion - imposition of an annual levy of 2% of cost of existing petrol cars and 4% of diesel cars to persuade people to rely more on public transport rather than buying cars.

    Amicus curiae and senior advocate Harish Salve, who has been assisting the forest bench of the Supreme Court for nearly a decade, lamented that the benefits of switching the entire public transport system in Delhi to CNG was lost as more and more diesel cars were added every year because of the price differential between petrol and diesel.

    "Delhi has already exhausted all soft options," warned Salve before arguing before a bench of Justices Aftab Alam, K S Radhakrishnan and Swatanter Kumar that "the solution must be to restrain the growth of personal vehicle usage, particularly diesel vehicles, and this is only possible through a highly augmented transport system in Delhi and the region".

    Justifying harsher levy for diesel cars, Salve said in his application, "The market share of diesel cars is more than 50% of sales. This is because of the growing differential between petrol and diesel. The emission norms for diesel cars legally allow higher limits for NOx and particulate matters as compared to petrol cars."

    The former solicitor general, while advocating imposition of 25% of cost of all new diesel cars as green tax, suggested levy of an environmental compensation charge on existing personal vehicles -- ranging from 2% (petrol) to 4% (diesel) of the vehicle's cost every year.

    For old cars, the levy would be collected annually by the insurance companies along with the premium amount, he suggested, and said the insurance companies must ensure that the vehicle had valid pollution under control certificate at the time of annual renewal of policy.

    If Salve's suggestions are to be implemented, then a person purchasing a diesel car costing Rs 6 lakh would pay a green tax of Rs 1.5 lakh. If the cost of an SUV is Rs 16 lakh, then the buyer would have to pay Rs 4 lakh extra.

    How does it work out for existing petrol and diesel cars? If a person owns a small petrol car which cost him Rs 3 lakh, then he pays Rs 6,000 every year as environmental compensation charge along with the insurance premium amount.

    If the petrol car was priced at Rs 25 lakh, then the owner's share of annual tax would be Rs 50,000. One who owns a Rs 6 lakh diesel car would pay Rs 24,000 annually while a person owning a Rs 16 lakh diesel car would pay an annual green fee of Rs 64,000.

    Salve said the Environment Pollution Control Authority (EPCA) had been suggesting measures through the years but little was achieved on the ground because of poor implementation of these suggestions. "The city needs emergency level action to reduce the growing load of pollution in its air."

    He said pollution levels were increasing alarmingly every year in Delhi making the air more toxic and unhealthy to breathe, an issue which TOI focused yet again this year through a series of reports highlighting increase in toxicity of air because of pollution.

    Salve said, "Today Delhi alone adds roughly 1,400 new personal vehicles a day, more than double of what was added in the pre-CNG period. Therefore, even as each new generation vehicles and fuel has become cleaner, the gain is lost because of the number of vehicles that are being added to the road."

    In addition, the entry of large number of trucks into Delhi for inter-state passage had created an urgent need to expeditiously complete the Eastern and Western Peripheral Expressways, work on which has been stalled for years despite monitoring by the Supreme Court, Salve said.

    "By 2010, there were 12 lakh vehicles entering and leaving Delhi every day and over 70% of these were cars. In the NCR region, Gurgaon, Faridabad and other satellite towns have grown to be important commercial hubs but have completely inadequate public transport connectivity. This is a phenomenal growth and has greatly contributed to the congestion and pollution in the city and the NCR region," he said and requested the court to direct private contractors to complete work on these two expressways by May 31 next year.

    Salve said the Western Peripheral Expressway (WPE), which was scheduled for completion in June 2009, has achieved "virtually no progress on the Kundli-Manesar segment, which is vital to decongest Delhi and reduce pollution considerably".

    "This expressway, once commissioned, will ensure that goods traffic emanating from Himachal Pradesh, Punjab, Haryana and western Uttar Pradesh bound to Jaipur, Maharashtra and Gujarat will have easy and faster access without using Delhi as corridor. The delay in completion of this expressway has a considerable negative impact on ambient air quality of Delhi. State of Delhi is suffering despite paying the cost of land acquisition in the ratio 50:25:25 between Delhi, Haryana and UP as approved by the apex court," he said.

    On EPE, Salve said though National Highways Authority of India (NHAI) has completed land acquisition for the expressway, the work has not been awarded.

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