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The new National Auto Policy will soon include taxation for automobiles based on their CO2 emissions. This move comes as a push towards green mobility by the government.
Officials from the Heavy Industry Ministry have started discussions over the possibility of a single regulatory body for the automobile industry.
The new Auto Policy is expected to be finalised soon. A draft of the new policy has already been released, recommending the rationalization of the GST structure.
The taxation is currently based on the vehicle's length, engine displacement, engine type and ground clearance. However, the new policy is set to replace this regulation. The new policy will base the taxation on the vehicle length and CO2 emissions.
According to the draft policy, the length-based classification will help reduce vehicular congestion.
While the CO2 emission-based classification will help move towards the vision of green mobility. The move will also help reduce the Greenhouse gas emissions.
The policy will also define the thresholds for length and CO2 emissions. These thresholds will have a neutralising impact on GST revenue.
The Auto Policy will also be able to monitor and review the thresholds based on the market share of green vehicles.
The new Auto Policy will also strengthen the rollout of the FAME scheme. This will further introduce technical classifications for the subsidy. The FAME subsidy will be based on fuel consumption improvement and battery energy density.
Thoughts On The CO2 Based Vehicle Taxation
The government of India is moving towards green mobility in the country. These steps towards taxation based on CO2 emissions is just one of the many steps by the government. The FAME scheme is also another move, towards the vision of green mobility in India.