Want to buy a new car? Get ready to pay more as green cess

New Delhi, Dec 14 : With the aaam aadmi already burdened by the fuel price hike and inflation shooting up, there is more trouble in the pipe line for the common man. The hurt could be targeted towards those who own cars, with the buying and usage of cars all set to be a costly affair.

The proposal put forward by the Planning Commission working group has suggested that a green surcharge of Rs 2 on every litre of petrol, a green cess of 3% of the annual insured value of all private vehicles be levied. A hefty urban transport tax is also proposed to be slapped on car buyers at the time of purchase of private vehicles.

The panel headed by current Delhi Metro chief E Sreedharan made the proposals that suggested the urban transport tax on purchase of new cars and two-wheelers at 7.5% of the total cost of petrol vehicles and 20% in case of personal diesel cars.

The recommendations were based on the principle of "polluter pays principle" and fundamentally aims to discourage the rampant usage of private vehicles by imposing higher taxes. This will also help generate resources to fund public transport projects.

The new tax and surcharge will help the government gain Rs 235,741 crore in the 12th five-year plan (2012-17) and Rs 22,40,804 crore over 20 years.

The panel had decided on not imposing the green surcharge on diesel taking into lieu the multiple ises of the fuel. But the urban transport tax will be 20% for new diesel cars compared to the petrol variant.

The annual green cess will be levied through insurance companies and will be close to 3%. The same insurance firms collect 4% of the insured value of the vehicle as annual premium. Under the new proposal, the companies will collect 7% and pass on the additional 3% to the government.

The resources collected thus will meet the growing needs of growing urban transport requirements. The panel suggested exclusive funds at the state and city level via land monetisation, betterment levy, land value tax and hike in property tax. There was also a proposal for a congestion tax, a cess on sales tax and hike in parking charges to generate resources for the fund.

OneIndia News