Vehicle scrappage policy: Govt. incentives & finer details

State governments to offer road tax rebate of up to 25% for PVs and up to 15% for CVs.

The Finance Minister had announced the much awaited vehicle scrappage scheme during her Budget speech last month. Now, Nitin Gadkari - Minister of Road Transport and Highways, has revealed the finer details of the scheme.

• As per the policy, the scrap value for old vehicles to be given by the scrapping centre to be approximately 4-6% of ex-showroom price of new vehicle.
• OEMs to provide 5% discount on the purchase of a new vehicle against the scrapping certificate.
• State governments to offer road tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles.

The minister has also stated that the rules for fitness tests and scrapping centres will be applicable from October 1, 2021. Scrapping of government and PSU vehicles which are older than 15 years will come into effect from April 1, 2021.

Fitness certificates will be mandatory for heavy commercial vehicles from April 1, 2023. It will be made mandatory for other categories in a phased manner from June 1, 2024.

Commercial Vehicles that are found unfit to run will be de-registered after 15 years, while private vehicles will be de-registered after 20 years. A vehicle that fails the fitness test or fails to get renewal of registration will be declared as 'End of Life Vehicle'.