Right to live in clean and healthy environment is a fundamental right and included as an integral part of Right to Life under Article 21 of the Constitution of India, 1950. Witnessing the rise of carbon dioxide (CO2) emissions which is polluting the environment leading to climate change by affecting the current ecosystem, climate mitigation is one of the biggest challenges around the globe. India being the developing country, is one of the major contributors to global CO2 emissions. Amongst all sectors in India, automobile sector is creating majorly in air pollution leading to climate change leading to cascading effect on sustainable development. At present, there is no legislation in India that uniquely focuses on reduction of carbon emissions and climate change, although various environmental legislation focuses on pollution control and environmental restoration. Supreme Court of India in various judgements had highlighted the concept of Polluter Pays Principle, but this principle was not so effective as it never excluded the possibility of polluting the environment. To be in consonance with the Paris Agreement 2015, India have committed to achieve Net Zero Carbon Emissions by 2030 but there is no stringent law adopting the measures to attain such lofty goals. The author suggests that the implementation of carbon tax is one of the best and effective mechanism to deal with issue of climate mitigation. The paper analyses the legislation of Japan as Japan became the first Asian country to implement the carbon tax and have aimed to reduce 80% CO2 emissions by 2050. The author will also study the legal issues and challenges in implementing the carbon tax within India to achieve the global commitment of Net Zero Carbon emissions