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Vehicle Scrappage Policy – All You Need To Know About

Nirmala Sitharaman, the Finance Minister of India had announced the vehicle scrappage policy during her speech in the 2021 budget session. Now, the Transport Minister, Nitin Gadkari has revealed more details of the scheme. Here are all the things that you need to know about this much-awaited scrapping policy: – 

vehicle scrappage policy india 2021

  • The vehicle scrappage policy aims to reduce air pollution by eliminating old vehicles from the road. Thus, it will also helpful in boosting the sales of new vehicles in the country.
  • Private vehicles older than 20 years and commercial vehicles older than 15 years will have to undergo fitness tests at government-certified fitness centres. Appointment for fitness centres may be booked online and test reports will be generated in an electronic mode.
  • Vehicles that are found unfit in tests or in case of failure to obtain fitness certification, will be de-registered and then they will not be allowed to run on roads and the owner will have to phase it out. 
  • If the vehicle clears the fitness test then the owner will have to pay certain taxes, including green tax to use it on the roads. The re-registration charges of all vehicles are likely to be hiked from 8 to 20 times depending on the type of vehicle. 
  • The rules for fitness tests and scrapping centres will be notified by October 2021. 
  • Vehicle owners can scrap their vehicles anywhere in the country irrespective of their registration place. 

vehicle scrappage policy india

  • The owners will be provided with a scrapping certificate after which they will be eligible to avail the incentives proposed under this scheme. 
  • The scrapping centre will give a scrap value for old vehicles by nearly 4-6% of the ex-showroom price of a new vehicle.
  • Govt has also advised OEMs/vehicle manufacturers to provide a 5% discount on the purchase of a new vehicle against the scrapping certificate. In addition to this, the Transport Ministry has also proposed some relief in GST for buying new vehicles by scrapping old vehicles.
  • The ministry has also suggested the state governments to offer up to 25% rebate on the road tax for personal vehicles and up to 15% for commercial vehicles.
  • The policy will not be applicable on vintage cars.
  • The scrapping of government and PSU vehicles (older than 15 years) will come into effect from 1st April 2022.
  • Fitness certificates will be mandatory for heavy commercial vehicles from 1st April 2023. It will be made mandatory for other categories in a phased manner from June 2024.
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