MoRTH Introduces New Vehicle Scrappage Policy

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Good news for all old automobile owners  –  owners can now receive benefits in return for their old vehicle as per the new vehicle scrappage policy. To finalise the necessary information, The Ministry of Road Transport and Highways has now recommended a reduction in the road tax imposed for the registration of a new car, rather than a vehicle scrapping certificate. The ministry has proposed a reduction in road tax of up to 25% for personal vehicles and up to 15% for commercial vehicles. If all goes according to plan, this new incentive, which is part of India’s vehicle scrapping strategy, would take effect on October 1, 2021.

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According to the draft notification issued by the Ministry of Road Transport and Highways, a vehicle that is registered against the submission of a “Certificate of vehicle scrapping” will become eligible to receive a concession in the motor vehicle tax of up to 25%. This quantum will be applicable for non-transport vehicles, i.e. private vehicles. As for transport vehicles, their registration against a vehicle scrapping certificate will result in the vehicle receiving a concession of up to 15% in the road tax. The ministry hasn’t explained how the precise road tax reduction for each vehicle will be calculated.

Vehicel Scrappage 2

The notification also states these concessions will be available for up to 15 years for private vehicles and till up to eight years for transport vehicles. We are guessing this means you will have 15 years after scrapping your old private vehicle to use the certificate to receive a discount on the road tax. Eight years if it is a transport vehicle, of course. The ministry has invited suggestions for the aforementioned draft notification over the next month, after which a final notification in this regard will be issued.

These are small steps to make a huge impact on the automotive industry, a lot of customers use their vehicles to their full extent. And when it’s time to change, it becomes difficult to get a good deal. Thanks to the scrappage policy, this problem has been solved now.

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