Green lobby wants extra duty imposed on sedans, SUVs

Roudra Bhattacharya New Delhi | Updated on March 12, 2018


Suggests duty of Rs 1.62 lakh on diesel cars above 1,400cc

The Government should make not just luxury diesel cars and SUVs pricier, but also sedans from mass segment players, by imposing additional tax of Rs 1.62 lakh per vehicle of such type, a leading environment NGO has argued.

The enhanced levy has been suggested by the Centre for Science and Environment (CSE) in a letter to the Finance Minister, Mr Pranab Mukherjee, for the upcoming Union Budget.

The Ms Sunita Narain-led environmental lobby body has asked for an additional duty of Rs 1.62 lakh on private diesel cars above 1,400-cc and Rs 81,000 for those in the category below.

This, it said, will reduce the distortion in the pricing of petrol versus the cheaper, subsidised diesel.

“Diesel cars are 40 per cent of new car sales already. Cheap diesel is pushing the market towards bigger cars that guzzle more fuel. About 40 per cent of total diesel cars sold are above the 1,500-cc range,” it said.

CSE has also challenged the auto industry's claim that such cars hold a very negligible share of total diesel consumed. A report by the organisation said that the “number jugglery” is a “hogwash and a ploy to avoid higher taxes” by the Society of Indian Automobile Manufacturers (SIAM) and the Working Group or WGP (on Petroleum sector for the 12th Five Year Plan).

“SIAM/WGP estimates have reduced the share of diesel use by all the key sectors of the economy. Though overall diesel consumption has gone up since 2008-09, the share of road transport sector remains unchanged in the SIAM/WGP estimates,” the CSE report said.

SIAM, based on a Working Group report, had recently said that the share of the country's diesel consumption by private diesel cars stood at 0.6 per cent.

This countered the much higher 15 per cent number mentioned in the Kirit Parikh Report of February, 2010, which has since been quoted by several official agencies such as the Petroleum Ministry.

CSE has also raised question on the ‘Others' category in the Working Group report, which, with a 12 per cent share in overall diesel consumption, is not properly accounted for.


“The ‘Others' refers to diesel consumption by Railways and (power) generators across the country. Every process industry has a power backup these days. Gensets are used in residential blocks, telecom sector and many other industries,” Mr Vishnu Mathur, SIAM's Director-General told Business Line.

Asked if SIAM will respond to CSE's challenge, he said “They (CSE) can come and engage with us if they want. Our figures are based on primary data from the Planning Commission, while theirs is not.”

While SIAM accepts CSE's claim that current diesel engine have higher Nitrogen Oxide (NoX) emissions than petrol, it says that the Carbon Dioxide pollution is though lower.

The environment agency has said that diesel versus petrol emits seven times more particulates and five times more NoX.

“Petrol is better on some accounts, while diesel is good for the other. The particulate matter depends on the quality of fuel supplied, which has improved with Bharat Stage IV norms. In any case, as long as the vehicles meet the Government's emission norms, where is the argument,” Mr Mathur said.


Published on January 25, 2012

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