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Vehicle Scrapping Policy: All you need to know about incentives and disincentives

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Old vehicles cause more pollution, have higher maintenance, and consume more fuel. India has at least 4 crore 15-year-old vehicles and nearly 50 percent of these vehicles are older than 20 years.

Vehicle Scrapping Policy: All you need to know about incentives and disincentives
In a bid to encourage people to discard their old vehicles that cause more pollution, have higher maintenance and consume more fuel, the Union Ministry of Road Transport and Highways has issued a list of incentives and disincentives concerning the Vehicle Scrapping Policy.
According to the GSR (General Statutory Rules) notification published in the Indian Gazette, "As an incentive, there will be a waiver of the fee for issue of the certificate of registration for a new vehicle, purchased against the authority of the Certificate of Deposit (CoD) issued by a Registered Vehicle Scrapping Facility for a vehicle being scrapped."
Meanwhile, the disincentives include:
  • Increase in the fee for conducting fitness tests and renewal of fitness certificates for motor vehicles more than 15 years old.
  • Increase in the fitness certification fee for transport vehicles more than 15 years old.
  • Increase in the renewal of registration fee for personal vehicles (non-transport vehicles) more than 15 years old.
  • Here are the revised charges for the assignment of a new registration mark or renewal of the certificate of registration:
    VehicleNew registrationRenewal of registration
    Motor cycleRs 300Rs 1,000
    Three wheeler/QuadricycleRs 600Rs 2,500
    Light motor vehicleRs 600Rs 5,000
    Imported motor vehicle (two or three wheeled)Rs 2,500Rs 10,000
    Imported motor vehicle (four or more wheeled)Rs 5,000Rs 40,000
    Other vehiclesRs 3,000Rs 6,000
    Here are the charges for grant and renewal of the certificate of fitness for motor vehicles older than 15 years:
    VehicleManualAutomated
    MotorcycleRs 400Rs 500
    Three-wheeled or light motor vehicle or quadricycleRs 800Rs 1,000
    Medium goods or passenger motor vehicleRs 800Rs 1,000
    Heavy goods or passenger motor vehicleRs 1,000Rs 1,500
    Here are the charges for grant or renewal of the certificate of fitness for motor vehicles (transport) older than 15 years:
    VehicleCharge
    MotorcycleRs 1,000
    Three-wheeled or quadricycleRs 3,500
    Light motor vehicleRs 7,500
    Medium goods or passenger motor vehicleRs 10,000
    Heavy goods or passenger motor vehicleRs 12,500
    The changes will come into effect on April 1, 2022.
    The idea is to discourage people from keeping their old vehicles.
    Earlier, it was speculated that the Centre would give a waiver of up to 25 per cent on road tax to buyers of new passenger and commercial vehicles. However, the latest notification makes no mention of road tax, probably as road transport is in the Constitution’s concurrent list and road taxes are fixed by the States. The road tax is usually 10-14 percent of the vehicle price.
    In March, Union Minister for Road Transport & Highways Nitin Gadkari told Parliament that India has at least 4 crore 15-year-old vehicles. He added that nearly 50 percent of these vehicles are older than 20 years. The actual number of old vehicles is most likely to be higher than this as the central vehicle registration database of Vahan 4 (from where the aforementioned data is collated) doesn't include the details of three big States - Andhra Pradesh, Madhya Pradesh, and Telangana.
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