We’ve all been eagerly waiting for the vehicle scrappage policy and now its finally here. Yesterday Nitin Gadkari, Minister for Road Transport & Highways introduced the Vehicle scrappage policy in the Lok Sabha.
For those of us who aren’t aware of what the policy is all about let’s start with the basics.
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.
- This policy 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.
- This policy is also being implemented to boost the production and sales of new vehicles.
What are the incentives of the newly introduces scrappage policy?
- The first and foremost benefit is cleaner air. As inefficient vehicles will be taken off the roads, the air pollution levels will automatically decrease.
- Vehicle scrapping will ensure the removal of old vehicles and an increase in sales of new vehicles in India.
- With the increased sale of new vehicles with advanced safety features, travelling on Indian roads will become a lot safer.
- The government is also setting up authorized vehicle scrapping facilities, this will in-turn generate huge employment opportunities in India.
- Vehicle scrapping will be a breakthrough for the raw and precious metal recycling industry in India.
- The government has decided to offer a 5% rebate on the purchase of new cars. The only catch is, that you have to scrap your old vehicle under the Vehicle scrapping policy.
- However, the new scrapping policy will also include automated fitness and pollution tests for private vehicles older than 20 years, and commercial vehicles older than 15 years.
- He also stated that any vehicle failing the fitness test set-up under the PPP (public-private partnership) will do nothing but attract huge penalties and impounding.
- The government is also working upon introducing a “Green Tax”.
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 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|
- 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|
When can we expect the policy to be implemented?
- The appointments, as well as the results, will be generated online for which MORTH has not specified any time but below mentioned is the tentative timeline.
- October 1st 2021 – Rules for fitness scrapping centres will be released
- April 1st 2022 – Fitness testing for government and PSU vehicles
- April 1st 2023- Fitness testing for heavy commercial vehicles
- June 1st 2024- Fitness test rules to be rolled out for other categories
Want to Know more about the Vehicle Scrapping Policy CLICK HERE.