In his annual union budget, Finance Minister Arun Jaitley imposed a sales levy of up to 4 percent on new passenger vehicles, effective immediately, spurring a sell-off by investors in auto stocks like Maruti Suzuki India Ltd and Tata Motors. India has introduced a controversial “ green tax ” on new car sales , as the government seeks to fight pollution and traffic congestion . The controversy stems from fears that the new tax will impact on the already fragile recovery in the Indian automarket . Finance Minister Arun Jaitley imposed a sales levy of up to 4 % on new passenger vehicles , which immediately spurred a spin - off by investors in auto stocks like Maruti Suzuki , and Tata Motors . The tax , which is estimated to generate around $ 440 m 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 government seeks to fight pollution and traffic congestion . The controversy stems from fears that the new tax will impact on the already fragile recovery in the Indian automarket . Finance Minister Arun Jaitley imposed a sales levy of up to 4 % on new passenger vehicles , which immediately spurred a spin - off by investors in auto stocks like Maruti Suzuki , and Tata Motors . The tax , which is estimated to generate around $ 440 m 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 .