'Tax' Or 'Service Fee'? US Embassy, UK Agency Lock Horns Over 'Congestion Charge'

The US Embassy in London has refused to pay more than $18.6 million in charges from unpaid congestion fees while Transport for London said it is pushing the matter to be taken at ICJ.

US Embassy in London owes more than $18.6 million as congestion charge to Transport for London

Source : Getty

The US Embassy in London is at loggerheads with Transport for London (TfL) as the embassy refuses to pay over $18.6 million in charges from unpaid congestion fees. In order to mitigate the problem of traffic and pollution in central London, the congestion charge was introduced. Within the congestion zone, drivers are required to pay a daily charge of $19 between 7 a.m. and 6 p.m. on weekdays and 12 p.m. and 6 p.m. on weekends.

Claiming diplomatic immunity, the US embassy has declined to pay the charge, reported CNN. 

“In accordance with international law as reflected in the 1961 Vienna Convention on Diplomatic Relations, our position is that the Congestion Charge is a tax from which diplomatic missions are exempt,” a US embassy spokesperson said.“Our long-standing position is shared by many other diplomatic missions in London,” the spokesperson added.

However, TfL has said it will pursue all unpaid fees adding that it is even “pushing for the matter to be taken up at the International Court of Justice.”

In response to US embassy's argument of diplomatic immunity, the TfL is insisting that in agreement with the UK government, London’s congestion charge constitutes a service and not tax. “This means that diplomats are not exempt from paying it.”

TfL has also politely declared there to be a "stubborn minority" of embassies that do not pay the charge, despite “representations through diplomatic channels,” and posted a lengthy list of offenders.

Congestion Charge In India

To tackle with the issue of rising traffic in Bengaluru, an expert committe, in collaboration with the Karnataka government had proposed to bring in a congestion tax last year. A report titled "Karnataka's Decade - Roadmap to a $1 Trillion Economy" has recommended to levy a congestion charge on all non-exempt vehicles entering the city during peak hours.

The report stated that the aim to introduce a congestion charge is to enhance travel times for buses, cars, and delivery vehicles while also making commuters more aware of their impact on traffic congestion during rush hours.