The government’s proposal to introduce the scrappage policy for vehicles for above 15 years of use might be a reality soon as according to the Ministry of Road Transport and Highways, Government of India, the policy will be notified soon and will likely be implemented from the 1st of April, 2022. “The Minister approved the policy of deregistration and scrapping of vehicles owned by the Government department and PSU, which are above 15 years in age. It is to be notified and will come into effect from April 1 2022.” read a statement issued by the Ministry.
This policy is aimed at scrapping the private and commercial vehicles in the country that are older than 15 years so as to incentivise the demand for newer vehicles which would be complying with the stricter BS6 emission norms. It also includes the proposal of scrapping commercial vehicles beyond 8 years of use.
On July 26, 2019, the Govt had proposed some amendments to the motor vehicle fundamentals in order to allow for scrapping vehicles beyond 15 years of use. Earlier, Minister of Finance, Smt Nirmala Sitharaman had said the scrappage policy was in works and was then being fine-tuned by various ministries.
“We will take scrap from all over the world and here we will make an industry where we can use all new material and the cost will be less and the industry will be more competitive. We will get more export orders,” the union minister was quoted saying at an event earlier this month.
According to the govt, this move will help control air pollution levels in the country and also spur the demand for newer vehicles further propelling the auto industry. This is also aimed at smoothening the transition to electric vehicles which like it or not, are the future inevitably.
New green tax policy
The govt also announced a green tax policy. Vehicles over the amount of permissible limit of time will be charged green tax upon renewal of registration. Under the new Green Tax structure, transport vehicles older than 8 years could be charged at the rate of 10 to 25 % of road tax at the time of renewal of fitness certificate.
Personal vehicles will also be charged Green Tax at the time of renewal of Registration Certification after 15 years and the rates will differ for petrol and diesel-powered vehicles. This policy is subject to approval for state governments now.