The centre is mulling to impose a "green tax" on old polluting vehicles soon to protect the environment and curb pollution, NDTV reported.
The government has said that vehicles including strong hybrids, electric vehicles and those running on alternate fuels like CNG, ethanol and LPG will be exempted while the revenue collected through the green tax will be used to tackle pollution.
According to the government, the revenue collected from the green tax will be kept in a separate account.
Mentioning the benefits of the green tax, the centre said that it will discourage people from using vehicles which pollute the environment and motivate them to switch to newer, less polluting vehicles. "Green tax will reduce the pollution level, and make the polluter pay for pollution," the government said.
"The Union Minister for Road Transport and Highways Nitin Gadkari has approved a proposal to levy a ''green tax'' on old vehicles which are polluting the environment," it said in a statement.
The proposal will now be presented before states for consultation before it is formally notified.
Under the scheme, transport vehicles older than eight years could be charged green tax during the renewal of fitness certificate at the rate of 10 to 25 per cent of road tax.
"Personal vehicles to be charged green tax at the time of renewal of registration certification after 15 years; public transport vehicles, such as city buses, to be charged lower green tax; higher green tax (50 per cent of road tax) for vehicles being registered in highly polluted cities," the statement read.
Differential tax will also be charged based on fuel and the type of vehicle, it added.
Vehicles used in farming, such as tractor, harvester and tiller will be exempted from the tax.
The states will have to set up state-of-art facilities for emission monitoring, the centre said.