India has introduced a controversial “green tax” on new car sales, as the country continues to fight pollution and traffic congestion. The tax will be levied at Rs 25,000 per vehicle for cars with engines of more than 2.0 litres, while it is set to increase by another 50 percent in case of larger cars. Finance Minister Arun Jaitley imposed a sales levy of up to 4% on new passenger vehicles, which immediately spurred a sell-off by investors in auto stocks like Maruti Suzuki India and Tata Motors. Small diesel cars less than 4 metres long and with engines below 1500cc will be taxed at 2.5 percent and bigger diesel vehicles at 4 percent. The tax, which is estimated to generate around $440m in revenue in 2016, is being viewed as another blow for automakers, following the temporary ban from the Supreme Court on selling large diesel cars in Delhi, one of the world's most polluted cities.
India has introduced a controversial “green tax” on new car sales, as the country continues to fight pollution and traffic congestion. The tax will be levied at Rs 25,000 per vehicle for cars with engines of more than 2.0 litres, while it is set to increase by another 50 percent in case of larger cars. Finance Minister Arun Jaitley imposed a sales levy of up to 4% on new passenger vehicles, which immediately spurred a sell-off by investors in auto stocks like Maruti Suzuki India and Tata Motors. The tax, which is estimated to generate around $440m in revenue in 2016, is being viewed as another blow for automakers, following the temporary ban from the Supreme Court on selling large diesel cars in Delhi, one of the world's most polluted cities.