Vehicle Scrappage Policy Approved. New Green Tax To Be Introduced

Vehicle Scrappage Policy Approved In India

So, it seems that this year is gonna be full of surprises. You ask why? Well after a long wait the soon to be implemented Vehicle Scrappage Policy has finally been approved by MoRTH (Ministry of Road Transport and Highways).

However, before making the policy public it will be applied to government vehicles only. According to leading media sources, the policy was approved on January 25th and is suspected to go public from 1st April 2022.

What is the Vehicle Scrapping Policy?

  • To curb pollution and battle the slowdown in the automobile sector, the Government of India has proposed and funded a car scrapping policy.
  • It aims at replacing old vehicles from Indian roads with new one’s.
    Once a vehicle’s registration certificate expires beyond its operational limit, a user can go to any government-authorised scrapping centre and surrender the vehicle.
  • Moreover, the government is also planning to introduce a new ‘Green Tax’.

Click to read more about the Vehicle Scrappage Policy HERE

What is the new ‘Green Tax’ and how will it affect my old vehicle?

  • So, if you own a vehicle for more than 8 years you will have to pay an additional amount in order to keep it.
  • The tax amount could go as high as 50% of the road tax depending upon the city you live in.
  • However, as of now, the proposal will be sent to all the respective state government for a review.
  • For personal vehicles, the tax will be charged at the time of its renewal of the RC after the completion of its standard 15 years.
  • However, this percentage will go higher if you reside in a highly polluted city i.e Delhi.
Vehicle category Impact Green tax exemption Green tax amount
Two-wheelers Negligible 15 years Not quantified
Cars (private) Negligible 15 years Not quantified

Green tax on private vehicles

  • Getting over to the commercial hub, the new Green Tax will be charged at the time of renewal of its FC ) Fitness Certificate.
  • The amount charged will be 10 to 25% of the road tax.
  • For public vehicles like the amount will be lower than others.
Vehicle Category Impact Green tax exemption Annual road tax Green tax rate per cent of road tax Green tax per annum post exemption
Cars (commercial) Small 8 years ₹1600-3600 10-25% ₹160-900
CV goods 2T Small 8 years ₹1730 10-25% ₹173-433
CV goods 7.5T Small 8 years ₹4180 10-25% ₹418-1045
CV goods 16T Small 8 years ₹8510 10-25% ₹851-2128
CV goods 25T Small 8 years ₹15260 10-25% ₹1526-3815

Green Tax on Commercial Vehicle