green tax for 14 February 2026

India is facing an acute air pollution crisis, especially in urban and industrial regions. Vehicular emissions are one of the major contributors to deteriorating air quality, leading to serious public health consequences and environmental degradation. 

In this context, the concept of Green Tax has gained prominence as a regulatory and economic instrument to discourage the use of older, polluting vehicles and promote cleaner alternatives.

What is Green Tax?

Green Tax is an environmental tax imposed on older and polluting vehicles to reduce vehicular emissions and improve air quality. It is a fiscal instrument designed to internalize the environmental cost of pollution.

The Ministry of Road Transport and Highways (MoRTH) has proposed that:

• Transport vehicles older than 8 years will be charged Green Tax at the time of renewal of their fitness certificate.
• The tax will range between 10% to 25% of the road tax.
• Personal vehicles will be charged Green Tax after 15 years at the time of renewal of registration.
• In highly polluted cities, Green Tax may go up to 50% of the road tax.
• Public transport vehicles such as city buses will be charged comparatively lower Green Tax.
• Differential taxation will apply based on:
  • Fuel type (petrol/diesel)
  • Type of vehicle
  • Pollution level of the city

Green Tax in India Objectives

• Reduce Vehicular Pollution: Discourage the use of old and highly polluting vehicles to lower emissions of CO, NOx, and particulate matter.
• Protect Public Health: Minimize respiratory and cardiovascular diseases caused by prolonged exposure to polluted air.
• Implement Polluter Pays Principle: Ensure that owners of pollution-causing vehicles bear the environmental cost of their actions.
• Promote Clean Mobility: Encourage adoption of electric, hybrid, and alternative fuel vehicles through differential taxation.
• Support Climate Commitments: Contribute to reduction of greenhouse gas emissions in line with India’s climate goals.
• Generate Dedicated Funds for Pollution Control: Create a separate revenue stream to finance air quality improvement and sustainable transport initiatives.

Green Tax Legal Provisions

Green Tax in India is supported by constitutional mandates, statutory provisions, and environmental principles that empower the State to regulate pollution and protect public health.

• Article 21 of the Constitution: The Right to Life has been judicially interpreted by the Supreme Court to include the right to a clean and healthy environment, forming the constitutional basis for pollution control measures like Green Tax.
• Article 48A (Directive Principles of State Policy): Directs the State to protect and improve the environment and safeguard forests and wildlife, providing policy backing for environmental taxation.
• Article 51A(g) (Fundamental Duties): Imposes a duty on citizens to protect and improve the natural environment, reinforcing shared responsibility in environmental protection.
• Motor Vehicles Act, 1988: Provides the legal framework for vehicle registration, renewal, and fitness certification, under which Green Tax is levied on old vehicles during renewal.
• Air (Prevention and Control of Pollution) Act, 1981: Empowers authorities to prevent and control air pollution, supporting measures targeting vehicular emissions.
• Environment (Protection) Act, 1986: Grants broad powers to the Central Government to take necessary steps for environmental protection, including regulatory and fiscal measures.
• Polluter Pays Principle (Judicial Doctrine): Recognized by Indian courts as part of environmental law, mandating that polluters compensate for environmental damage, forming the conceptual foundation of Green Tax.
• Federal Structure and State Powers: Since road tax and vehicle registration fall under State jurisdiction, individual states determine the rate and implementation details of Green Tax within the broader central guidelines.

Green Tax vs Carbon Tax

Green Tax and Carbon Tax are environmental fiscal instruments designed to reduce pollution, but they differ in scope, structure, and implementation. The difference between Green Tax and Carbo Tax is given below:

Green Tax vs Carbon Tax
Basis of Comparison	Green Tax	Carbon Tax
Definition	Environmental tax imposed on old and polluting vehicles.	Tax imposed on carbon emissions from fossil fuels.
Scope	Sector-specific (primarily transport sector).	Economy-wide (power, industry, transport, manufacturing, etc.).
Objective	Reduce local air pollution and vehicular emissions.	Reduce greenhouse gas (GHG) emissions to combat climate change.
Basis of Levy	Age of vehicle, fuel type, pollution level, and city category.	Quantity of CO₂ or carbon content in fuel consumed.
Level of Implementation	Generally implemented by State Governments during registration/fitness renewal.	Usually imposed by Central/National Governments.
Environmental Focus	Local air quality improvement (PM, NOx, CO reduction).	Global warming mitigation and emission reduction targets.
Revenue Use	Dedicated funds for pollution control and environmental measures.	May be used for climate programs, renewable energy, or general revenue.
Example in India	Tax on transport vehicles older than 8 years and personal vehicles after 15 years.	India does not have a formal carbon tax but imposes a coal cess (carbon-related pricing mechanism).

 

Green Tax Criticism

While Green Tax aims to reduce pollution and promote sustainable mobility, it has been criticized for its economic impact and implementation challenges

• Additional Financial Burden – Imposes extra cost on vehicle owners, especially middle- and lower-income groups who own older vehicles.
• Impact on Public Transport Fares – Transport operators may pass the tax burden to passengers, increasing travel costs.
• Inflationary Pressure – Higher transportation and logistics costs can raise prices of essential goods and services.
• Existing High Fuel Taxes – Critics argue that petrol and diesel are already heavily taxed, making Green Tax an additional burden.
• Limited Effect Without Enforcement – Weak vehicle fitness checks and poor monitoring may reduce its effectiveness.
• Equity Concerns – Disproportionately affects those who cannot afford to replace old vehicles with new, cleaner models.

Way Forward

• Make Clean Vehicles Affordable – Reduce taxes and give incentives on electric and hybrid vehicles so people can easily shift to cleaner options.
• Improve Fitness Testing – Ensure strict and transparent vehicle emission checks so old polluting vehicles cannot run without control.
• Use Tax Money Properly – Spend Green Tax funds only on pollution control, public transport, and clean energy projects.
• Promote Public Transport – Improve buses, metros, and shared transport to reduce the number of private vehicles on roads.
• Encourage Vehicle Scrapping – Provide benefits to people who scrap old vehicles and buy new low-emission vehicles.
• Create Public Awareness – Educate people about pollution and motivate them to use cleaner transport options.