India Plans New Taxes on Cars

India intends to levy new taxes on cars to help curb pollution and congestion beginning April 1. But carmakers say the measures are too simplistic to be fully effective, The Financial Express reports.

The government’s budget for fiscal 2016 would hike taxes on small diesel cars 2.5% or 4% depending on whether their engines are smaller or larger than 1.5 liters. An additional 1% tax would be added on all passenger vehicles that cost more than 1 million rupees ($14,800).

The tax increase would drop to 1% for gasoline-powered cars measuring less than 4 meters long and powered by engines displacing less than 1.2 liters. No new taxes would be added to electric, hybrid or fuel cell-powered cars or two- and three-wheelers.

Carmakers had hoped the government would aid the industry’s growth through lower excise duties and an old-car scrappage incentive, according to the FE.

The newspaper says producers are disappointed that the budget doesn’t offer incentives for ultra-low-emission vehicles. They also complain the new tax scheme focuses too much on vehicle size and not enough on powertrain efficiency.