Delhi has introduced a controversial “green tax” on new car sales, as the country continues 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 Tamil Nadu imposed a sales levy of 0.7 percent 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 India , 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 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 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.