A "green" tax aimed at discouraging high consumption of petroleum products may be in the offing, a government official said today. The tax, perhaps in the form of a cess on consumption, would also check vehicular pollution to some extent and also help in controlling the high oil subsidy burden.
Over the years, the central government and some states have granted excise, Customs duty and sales tax exemptions on a host of non-conventional energy resources like wind turbines, among others. The aim is to promote the use of renewable energy. However, there are no measures in place to discourage and reduce the use of polluting fuels.
With no sign of moderation in demand for petroleum products, government officials feel a "green" tax should be levied on automobiles, on the lines of similar taxes in the United Kingdom. Some tax experts also agree with this view. However, given the ramifications of such a move and a possible consumer backlash in the run-up to next year's general election, the government is unlikely to introduce the tax soon.
"Many developed countries have green taxes. Sooner than later, India may also introduce such a tax," another expert said.