New Delhi, Jan 16 (UNI) The CSE today shot off a letter to Finance Minister P Chidambaram, seeking removal of central excise duty on buses and at the same time no reduction in existing tax rates on cars and sports utility vehicles (SUVs).
At present, the government charges 16 per cent central excise tax on passenger buses.
The letter by the Centre for Science and Environment (CSE) sought a guidance to the state governments to correct the current distortions, which tax the bus more than the car.
''You will agree this is ridiculous,'' it added.
The letter urged the government not to reduce the existing rates on cars and SUVs but also to maintain the differential taxes between small and big vehicles. ''Any reduction on taxes on cars will only add to the subsidy being given to such vehicles as against buses.'' The NGO further asked for an increase in the excise duty on diesel cars in the Budget 2008 or measures to provide the required disincentive for the growth of private vehicles on ''cheap'' fuel.
''At present, the car manufacturers use the price differential on petrol and diesel as a convenient loophole to sell cars which run on fuel of the poor,'' it added.
The CSE also urged the Finance Minister to link central excise duties with fuel efficiency standards once finalised and provide tax breaks to vehicles those meet the advanced clean emission norm.
''The car is not the problem, but the government policy and regulation is. We strongly believe that the current fiscal and regulatory policies do not adequately take into account the social, health and environmental costs of motorisation,'' CSE Director Sunita Narain told journalists here.
She claimed that the current fiscal policies were ''distorted and downright wrong'' as these end up taxing the bus, which moves the largest numbers of people in Delhi, more than the car that drives few persons but ''hogs valuable'' road space.
''Cars do meet our aspirations, but not our needs. Our needs must be met by the public transport. There is a need to change the policies. The government talks a lot on public transport system, but does very little in this regard,'' Ms Narain said.
She claimed that the car owners were already enjoying enormous hidden subsidies in Indian cities. ''They do not pay adequately for the disproportionately high usage of road space or for parking,'' the CSE Director added.
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