Conceptualizing the Model E-GST: A Case for Environmental Taxation in India

Abstract

The excessive generation of Green-house gases and its disastrous release into the unprotected, fragile ecosystem has reached alarming proportions on a global scale. The studies conducted in 2021^[1] by the International Monetary Fund (IMF) have underlined the inadequacy of efforts put in thus far. Further, the studies also reveal that the gaps can be supplemented with introduction of eco-taxation on a universal level, not just parochially. It is our hypothesis that the introduction of Eco-taxation (on industries) can be helpful in reducing all types of pollution including the ones related to air and water.  Apart from generating eco-awareness in the masses, the proposed model E-GST (Environmental Goods and Service Tax) can be instrumental in incorporating the much-needed changes in the existing taxation structure and thereby bring pollution formally under a taxation regime that supports the polluter-pays principle. The methodology will involve ENVEEN Model (Environment Energy Economy Model) engaging with de-novo approach of environmental taxation.