What Is Green Tax For Bikes: When It Is Applicable and How to Pay

Posted on: Jul 3, 2024 | 3 mins | Written by: HDFC ERGO Team

What Is Green Tax For Bikes: When It Is Applicable and How to Pay

Environmental degradation is an alarming issue today, so it becomes imperative for us to do our best to protect the environment from further irreversible damage. As an effort in this direction, the Government of India imposed a green tax on old vehicles, starting in January 2021. With this initiative, the policymakers aim to reduce vehicular pollution.

What is the Green Tax?

A green tax, also referred to as a pollution or environmental tax, is a tariff paid on all commodities or activities that damage the environment. The government also levies this tax on old vehicles running on petrol and diesel. The green tax aims to:

- curb pollution by reducing the number of unsustainable vehicles on the road

- catalyse the adoption of eco-friendly transportation

The environmental tax is charged as a proportion of the road tax. Since the road tax varies by state, so does the green tax. Commercial vehicle owners are liable to pay 10-25% of their road tax as green taxes, while for private vehicle owners, it may be up to 50%.

For instance, if the road tax is Rs. 6000, a commercial vehicle owner may have to pay up to a maximum of Rs. 1500 as green tax, and a private vehicle owner up to Rs. 3000.

When is a green tax applicable?

Commercial vehicles older than 8 years and private vehicles older than 15 years are levied green tax. CNG and electric automobiles are exempted from this charge. Green tax for bikes or any other vehicles has to be paid during the renewal of the RC (Registration Certificate).

How to pay green tax online?

Here’s how to pay green tax online:

- Go to the VAHAN portal and log in using your credentials.

- Input your bike’s registration number in the appropriate field and click on Proceed.

- Click on Pay Your Tax and enter your phone number.

- Upon completing the OTP verification, select the relevant tax mode.

- Clear the outstanding green taxes using any online payment method.

You’ll receive a notification once you complete the payment.

Conclusion

Green tax is applicable for both old private and commercial vehicles. Owners of old two-wheelers must remember that clearing off the duty is just as crucial as purchasing bike insurance.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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