Green cess to be levied on petrol, cars?

According to reports, using private vehicles is set to become costlier as a Planning Commission working group has suggested levying a green surcharge of Rs. 2 on every litre of petrol and a green cess of 3% of the annual insured value of all private vehicles. In addition, a higher urban tax has also been proposed which will be levied at the time of making purchase of the vehicles.

Diesel is still out of it but incorporated through back door by a higher urban transport tax on new diesel cars at 20% compared to 7.5% for petrol driven vehicles.

These recommendations are guided by the polluter pays principle. This is to discourage the use of private vehicles.

Given the fact that fuels in India is already very high priced with a major taxation, the green cess although a good idea might actually additionally burden the consumers. A green tax may not be the right way of encouraging consumers to shift to public transport. People in Delhi shifted to Metro because of the excellent facilities provided by it. Unless and until, there is a well connected public transport system in all cities, people really would have no choice but to continue using their private vehicles.

Reference:http://articles.timesofindia.indiatimes.com/2011-12-14/india/30515602_1_urban-transport-green-cess-private-vehicles

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