Green tax on vehicles riles Himachal tourism industry

Shimla has around 87,000 vehicles registered locally, while it has parking space for only around 1,000 vehicles
Shimla has around 87,000 vehicles registered locally, while it has parking space for only around 1,000 vehicles

The Himachal Pradesh Government’s move to impose ‘green tax’ on tourist vehicles entering Shimla has caused heartburns and the burgeoning tourism industry is up in arms against it. The industry — including tour operators, hoteliers and other stakeholders — has opposed it tooth and nail. The Tourism Industry Stakeholders Association (TISHA) has threatened to observe a ‘black day’ if this decision is implemented by the Shimla Municipal Corporation.

TISHA President MK Seth observed that “the move to levy green tax is ill timed and ill conceived. On one hand, the Himachal Pradesh Government has been organising Summer Festival at the Ridge for years and has now introduced the Apple and Food Festivals to woo tourists, on the other hand, the civic body is all set to levy Green Tax on tourist vehicles which would badly hit the tourism industry”. As per a decision taken by the Shimla Municipal Corporation, green tax would be imposed on all vehicles entering Shimla.

In 2013, the Shimla Municipal Corporation had forced a similar scheme and engaged a private company to implement it. In return, the company had offered to pay 6 crore per annum to the Shimla Municipal Corporation. Under the scheme, heavy vehicles entering the capital town had to pay a green tax of 500, while vehicle owners of SUVs had to pay 300 as tax and four wheeler owners had to shell out 200 per vehicle. There was strong opposition to the move and the entire scheme collapsed in just four months of its launch with much fanfare. The Shimla Municipal Corporation had installed a barrier at Tara Devi on the outskirts of Shimla to collect the green tax but tourists strongly objected to this. The tourists had also alleged misbehaviour by the staff deployed at the tax barrier. The issue flared up and the matter reached the court. Subsequently, a ban was imposed on the green tax.

Mayor of Shimla Municipal Corporation, Sanjay Chauhan claimed that “the revenue collected through the Green Tax would be at least 19 crore per annum. This would be spent on environment related activities and to improve tourism infrastructure.” The Shimla Municipal Corporation would soon launch a mobile green app to facilitate vehicle owners from others state to pay green tax online. The corporation will levy a fine of 5,000 if any vehicle owner is found guilty of not paying green tax. For this, a team of municipal corporation employees and Himachal Pradesh police would be deployed to ensure that vehicle owners from other states entering Shimla pay the tax.

The association has sought reconsideration of the decision and has warned that in case the Shimla Municipal Corporation remains adamant on its stand, the body would have no option left but to approach the court against the policy of imposing green tax without creating tourism infrastructure and necessary parking facilities. Asserting that the tourism is already not on the upswing, the association points out that 90 percent of tourist coming to Shimla are budget tourists and stay for one or two days while the SMC would charge green tax for minimum one week, which is unjustified. The association members said that the tax would be a bane for the tourists who come to spend leisure time in the town. A penalty of 5,000 for defaulters would virtually kill the tourism industry.

Genesis of issue
The Himachal government apparently decided to impose green tax when the National Green Tribunal directed the state government to take steps to reduce air and noise pollution in the state capital. The state was directed to impose 500 as green tax on each vehicle that spread pollution on Shimla’s restricted roads, including the Mall Road. The Tribunal asked the government to consider implementing one-way traffic on the Cart Road, the circular road in the State capital. “Definite steps are required to be taken at the earliest. If not taken now, the day is not far when the ambient air quality of Shimla would deteriorate to an undesirable level, causing health hazards,” the Tribunal Bench headed by Justice Swatanter Kumar observed. “It’s a matter of common knowledge that air and noise pollution, particularly in Shimla, is increasing by the day. Traffic congestion is one of the major contributors to such excessive pollution,” the Bench said.

The State was ordered to declare “silence zones” and display sign boards at prominent places in Shimla and ensure that no noise was produced by any process, including horns, in such zones. The Tribunal also directed to ensure no parking on the sealed roads, besides smooth traffic movement on the Cart Road. The NGT asked the Himachal government to revisit all vehicle permits for sealed and restricted roads within three months, completely prohibiting or restricting vehicular traffic on such roads. The 13-page order asked that the State government to take immediate steps to comply with the directions. Subsequently, in a meeting of the finance committee of Shimla Municipal Corporation, it was decided that tax-collection points would be set up at all entries of the tourist town and that the money collected would be used for improving tourist infrastructure and conserving the environment.

Earlier in Delhi, the National Green Tribunal had directed that commercial vehicles entering the national capital must pay an environmental compensation charge in addition to the toll tax, given that emissions from vehicles were responsible for the bulk of the PM load that pollutes the ambient air. The apex court had also ordered the imposition of an Environment Compensation Charge of 700 for light commercial vehicles, and 1,300 for three-axle vehicles and above, entering Delhi. The court took note of a study by the Centre for Science and Environment (CSE) that found that about 23% of commercial vehicles and 40%-60% of heavy trucks entering the city were not destined for Delhi. The court said it was necessary to impose the charge, along with the toll imposed by the civic bodies, to equalise the difference in cost between travelling through the city and taking alternative routes.

Rationale of the tax?

Green tax is a tax on environmental pollutants or on goods whose use produces such pollutants and is meant to improve the environment or reduce the negative impact on the environment or create an environmentally sustainable environment. Green tax is a kind of economic instrument to address environmental problems.

One green tax that has gained favour is carbon tax. Australia introduced carbon tax, which is an excise levy on the carbon-based content of coal, petroleum, gas as a means of reducing greenhouse gas emissions that contribute to global warming and climate change. The carbon tax may encourage development and use of clean energy. India and Japan have also introduced carbon tax.

In Europe, a number of countries have imposed energy taxes or energy taxes based partly on carbon content. There is apparently no green tax in the US; however green tax supporters often cite the gasoline tax as one. Many European countries have used pollution taxes, imposing taxes on emissions of common air pollutants such as sulfur dioxide and nitrogen oxides.

To combat the negative environmental effects, several states in India (Maharashtra, Andhra Pradesh and Karnataka) have implemented or are going to implement a new tax to fight pollution from vehicles. Everyone may not agree with this way of reducing environmental burden and preserving the environment. The revenues generated can also be used for other environmental preservation projects or to cut other taxes. Nevertheless, everyone would like to see an environmentally sustainable future and a healthy natural and living environment. And that seems to be the motive of Himachal Pradesh when it imposed green tax.