[anjan_c2007]

The Nissan Motor India, Managing Director, Mr Rakesh Shrivastava has said that the government needs to levy GST based on emissions by the respective new cars. He put forth his views during the recent unveiling of the Nissan X-Trail, Jule and Qashqai (won't be surprised if it's pronounced as "Khushkai" in India, like the Maruti Versa was pronounced by quite a few as "Varsha" ).

According to him, length and engine size now considered to levy GST, need to be replaced by emission based GST levy for the respective vehicle.

“We can have different tax slabs based on the level of emissions,” Mr. Srivastava said here in an interaction, adding the government already had a different tax structure for below four metres, above four metres, in terms of length, and in terms of fuel. Under the GST regime, cars attract the highest tax slab of 28% and on top of that a cess is levied.

Small petrol cars with engine capacity less than 1,200cc attract only 1% cess, while diesel cars with engine capacity of less than 1500cc attract 3% cess, on top of the 28% GST rate.

Similarly, sport utility vehicles (SUVs), which include cars with length exceeding 4,000 mm and having a ground clearance of 169 mm and above attract a GST rate of 50%.

Newslink :-

https://www.thehindu.com/business/in...le66027259.ece

While appreciating his new age views, the levy of GST is fraught with multiple complexities, given our Indian scenario. When a well created system in the West can be fooled, hoodwinked and taken for a joy ride with "Cheat Softwares" by big MNC's to claim low emission tags, we can imagine the consequences here, going by the recent Western precedents.

Next, a new vehicle emits X amount of obnoxious gases when new. Over negligent usage by certain categories of owners, the emission levels get worse and even go berserk over the years.

The present system "length-size of engine" though flawed, has certain checks and balances. Vehicles cannot grow engine wise or lengthwise like biological creatures over the years, unless there is human intervention.

Would invite fellow members vote and their views on the subject.

[ValarMorghulis]

He could have simply said "The government needs to tax the car buyers more" because clearly no one else is going to foot this bill.

[aniyo]

I still prefer engine size and length-based tax. Honestly, I would have preferred the emission-based tax, but I don't think our country is ready for that.

See, the higher class cars can easily build a better emission system and lower tax, but the smaller, more affordable cars will struggle with higher taxes. This will be an unfair system.

Possibly, they are hinting at hybrid systems or electric cars, wherein they get to show dressed-up numbers and get benefits and pass on the burden to car buyers. I have very deep distrust in corporates, both Indian and global.

[condor]

So how different is this from what is today ?

Roughly speaking, emission depends on engine size and fuel type. Our current tax structure is based on this kind of grouping.

[StarrySky]

Why have only one system or the other, we can have both.

Emission-based taxes are already implemented in some way in some states in India - by having lower road taxes on EVs. Perhaps, what is needed is a common policy across the country on emission-based road taxes.

In a country like ours where road infrastructure is lacking and cities are crowded, I will argue that there is some merit in giving preference to smaller cars via taxation (GST).

I live in a country which has same VAT on all cars, but applies road-tax equivalent based on emissions.

[shancz]

Voted for length and capacity based.

With the rider for revisiting the sub 4m rule but given the investments already made by the industry I don't consider it feasible for now.

While the emission based, as mentioned in the OP is a good idea but the real world implementation is where it will fail like our traffic and driving systems.

[d-g-p]

Ideally a mix of both, but more priority to pollution.
But we are in a transition phase from ICE to Electric with Hybrids as a middle ground. We do not know how long this phase will last and hence the rules based on emission. It will be very difficult to implement emission based norms as the technology is rapidly growing.
But I feel the sub 4 meter rule has become dated. No global products are going to be based on this rule. Hence we are missing some world class products. I wish this category is extended upto at least 4.2 meters of length.

[Ravi Parwan]

Voted for emission based taxation system.

The length and engine capacity based law is flawed and has led to India losing out on world quality products. While emission based system might also be prone to gaming by manufacturers, but that can be countered with better vigilance and testing before approvals.

Further, An emission based taxation will work wonders for forcing manufacturers to focus on efficiency of the drive train and weight reduction of the vehicle. This should be counterbalanced by the safety norms, meaning you can't have a tin can giving great mileage and low emissions at the cost of compromised passenger safety.

There is a danger that this will lead to underpowered cars but we need to force the manufacturers to focus on the basics of the car rather than the frills which are touted so much ahead of the actual performance parameters of the car ( Read - ambient lighting, mood lighting, car air purifier, etal)

Originally Posted by StarrySky

Why have only one system or the other, we can have both.
Emission-based taxes are already implemented in some way in some states in India - by having lower road taxes on EVs. Perhaps, what is needed is a common policy across the country on emission-based road taxes.
In a country like ours where road infrastructure is lacking and cities are crowded, I will argue that there is some merit in giving preference to smaller cars via taxation (GST).
I live in a country which has same VAT on all cars, but applies road-tax equivalent based on emissions.

I would like to go one step ahead from what starrysky proposed. We are paying taxes for buying the cars and then also paying for using them through tolls. Why shouldn't the systems be integrated?

That way the taxation burden will follow more closely the usage pattern, I.e. the users that use the roads the most are the ones paying for their upkeep.

Originally Posted by anjan_c2007

Next, a new vehicle emits X amount of obnoxious gases when new. Over negligent usage by certain categories of owners, the emission levels get worse and even go berserk over the years.

This is a bigger problem linked to usage. People who run their cars long and hard without regards to proper maintenance are the ones polluting our cities and need to be stopped. Challans based on user submitted photos should be used to penalize such users and reward the reporters. that should help in putting an end to the impunity with which such vehicles ply on our roads.

[fhdowntheline]

I think its time to spell out in technically clear terms as to which type of engine will attract what % of GST. In my view EVs should be nil- to least, followed by strong hybrids, which would be lower than regular fossil fuel based cars with or without mild hybrid support. Size of vehicle and engine capacity is an outdated classification in my view, like the sham 180mm clearance threshold for example.

[McLaren_P1]

I’ve seen many large hybrids cars delivering less emission and better fuel economy vs much smaller pure internal combustion driven cars -> car size and emission can be potentially completed unrelated.

But I’m not sure we need different taxes based on emission - the government can simply raise the overall emission threshold requirement gradually (BS-6, and then so on). Automakers will naturally switch to less polluting powertrains (hybrids, EVs, etc).

But this also risks making cars more expensive in general, for the average buyer. On the other hand, we are getting quite affordable EVs now (Tara Tiago), so maybe not if the vehicle is engineered well.

[thanixravindran]

I thought we already implemented this indirectly in broad buckets. Electric cars are taxed at 5% GST. Petrol and diesel cars are at 28% GST with varying increase in cess on it based on engine size and length. But yes I would welcome taxation based on emissions, efficiency and safety any day rather than arbitrary length and engine size.

[akg7091]

Maruti is responsible for the bad name it gave to hybrids. This is why even the strong hybrids are taxed crazily by the govt while they should be incentivized - the more we promote strong hybrids the lower the costs will be and the country saves some precious forex as well. Emissions based taxation is the logical approach imo

[whitewing]

Emission based levy of GST, with the emission factoring grid supply as well for EVs.

Greener the grid supply, higher the discount (highest discount for home solar). It can be based on the area of the registering RTO.

[starke]

Voted for emission-based tax system.

Simple explanation is a lower engine capacity or a lesser lengthy car can make more emission than its opposite if the manufacturer does not prioritize its goal.

Also this is also an indirect way to phase out all diesel engines (I guess Nissan doesn't want others to continue with diesel as they got rid of it)

This will also push both manufacturer as well as the customers to go for the most efficient car due to its price which results much faster transition to electrified vehicles.

[djay99]

Voted for emission based levy.

I live in the EU, and both VRT and annual road tax are dependent on CO2 emissions here (mainly WLTP cycle).

People here are going toward more efficient cars, primarily because the higher cost of efficient cars allows them to save money on annual road tax (200 Euros vs 1000+ Euros per year).

This emission based tax mechanism also pushes manufacturers to design efficient cars.

While there is no annual road tax mechanism in India available to general public, I believe CO2 based taxation will help in solving pollution issues to a certain extent.