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Rediff.com  » Business » Own a big diesel car? You may be TAXED more!

Own a big diesel car? You may be TAXED more!

Last updated on: January 26, 2012 09:29 IST

Own a big diesel car? You may be TAXED more!

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The Centre for Science and Environment has demanded an additional duty of up to Rs 162,000 on big diesel cars to prevent the misuse of subsidised fuel for luxury.

While blaming the government for its inaction over the issue, the NGO also hit out at the auto industry body Society of Indian Automobile Manufacturers (SIAM) and vehicle makers for "propagating false information" about diesel technology and amount of the fuel consumed by cars and personal vehicles.

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Image: Volvo XC60.


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"Any car is a luxury. A car owner should not enjoy any subsidy. There should be additional duty on diesel cars to equalise the subsidy benefits given on diesel and petrol," CSE Executive Director (Research and Advocacy) and Head (Air Pollution and Urban Mobility) Anumita Roychowdhury said.

She said the recommendations of the Planning Commission's Kirit Parikh Committee of an additional Rs 81,000 equaliser excise tax for small cars with engines of less than 1,400 cc should be implemented in the Budget for 2012-13.

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"This amount should be doubled for bigger cars for equitable sharing of burden," she added. Urging to implement the proposal, CSE has already submitted a memorandum to the Finance Ministry, she said.

Stressing that consumers should be given equal excise benefit, Roychowdhury said: "Government is responsible for taxation and pricing. It has to equalise the prices. If it can not correct it immediately, then additional policy steps must be taken to prevent misuse of diesel for luxury.

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"With each litre of petrol replaced by diesel to run a car, the excise earnings of the government drop seven times. The effect of increased use of diesel in cars is so dramatic that the excise earnings from both diesel and petrol has nearly equalled."

Commenting on the findings of a joint report by SIAM and 12th Planning Working Group on Petroleum Sector (WGP), Roychowdhury said: "Their data is showing just 8.8 per cent of total diesel consumption is by cars, jeeps, MUVs, taxis and three-wheelers.

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"However, the same stands at 15 per cent in the government's Petroleum Planning and Analysis Cell (PPAC), which was cited in the Planning Commission's Kirit Parikh Committee Report of 2010."

Besides, 12.5 per cent consumption is showed in the 'others category' by SIAM-WGP report.

"What are these substantial uses of diesel that do not get covered by industry, power, agriculture or transport and is outside the policy purview of the government? By using this category, the relative share of the critical sectors of economy -- transport, industry and power -- have been reduced significantly," Roychowdhury blamed.

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However, when contacted, a SIAM official said the industry body stands by its own data.

Last week, SIAM had said that out of a total of 61.68 million tonnes of diesel consumed in India across various sectors during 2010-11, diesel personal cars consumed only 1.03 per cent, while for diesel taxi segment it was at 1.82 per cent.

Jeeps used for personal purpose accounted for 0.53 per cent and the same category of vehicle used for commercial purpose consumed 3.44 per cent, it had said.

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Tags: SIAM , TAXED , India

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According to CSE researchers, if the new diesel car fleet were to pay the same excise as that of petrol cars while purchasing the fuel, the potential excise revenue can be Rs 1,00,000 crore from the lifetime fuel use of the new car fleet to be sold between 2009 and 2015, she claimed.

At present, the excise duty on every litre of petrol stands at Rs 14.78, while the same is just Rs 2.06 for diesel.

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Tags: CSE , TAXED

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"The government is responsible for this disparity and the shift towards more demand for diesel vehicles for personal usage," Roychowdhury said.

The additional revenue collection should be utilised to fund production of clean diesel with 10 ppm (parts per million) sulphur to make a quick transition to Bharat Stage V and VI emissions standards, she added.

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CSE also highlighted the pollution related impact from emission of diesel vehicles in the country.

"We are not against diesel, but pollution in cities are rising and a special concern about vehicular pollution is there. We are already lagging behind on implementation of higher efficiency norms than the European nations," Roychowdhury said.

She claimed that as per data, diesel cars on an average emit 7 times more particulates and 3-5 times more nitrogen oxides than petrol cars.

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"There is sufficient evidence that tiny particulates like PM 2.5 emitted from diesel vehicle are toxic and carcinogenic. This must be accounted for in any calculation of the costs of diesel in the economy," Roychowdhury said.

CSE said according to estimates, diesel accounts for 40 per cent, which is 3,276 thousand metric tonnes (tmt), of the total fuel consumption by personal transportation sector and petrol cars use 4,272 tmt.



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