Regarding Diesel pricing Kirit Parikh committee made two recommendations:
1. decontrol the diesel prices.
2. Tax approx. Rs. 80,000/- on private passenger diesel vehicles to make up for the difference in excise duty on petrol & diesel.
I would like to sat that even if the central Govt. deregulate diesel, there will not be a major hike in diesel price. It may be Rs. 2 - 4 at the max. Once this is done, there will be no subsidy on diesel. So the proposed tax on vehicles is not linked to this.
Central excise on diesel is approx. Rs 2.50 and on petrol Approx. Rs. 14.50. Govt. charges this much less excise on diesel due to its usage in various sectors, as discussed in detail in this forum and can not make it same for both petrol and diesel. This is the only tax, due to which a private diesel car/SUV owner gets undue benefit vis a vis a petrol car/SUV owner. To compensate this very differential only, the Kirit Parikh committee recommended to tax diesel cars / SUVs upfront, based on some calculations.
Therefore, This additional tax has nothing to do with deregulation of diesel prices. It can be imposed even if diesel is deregulated. It is to compensate the lower excise duty on diesel being enjoyed by private diesel car / SUV owners.
The diesel car owners will still be enjoying lower state taxes (VAT), which is approx. 20% on petrol where as it is Approx. 12.5% on diesel in most of the states.