GOI Releases Lists of Incentives and Disincentives for Vehicle Scrapping Policy

The Ministry of Road Transport and Highways, Government of India, released a list of incentives and disincentives for the Vehicle Scrapping policy announced earlier this year. These are aimed at encouraging the owners of vehicles to discard their older vehicles that have higher maintenance and fuel requirements. The Central Motor Vehicles (23rd Amendment) Rules, 2021, will come into effect from April 1, 2022. 

As a part of incentives, the GOI has announced a “waiver of the fee for issue of 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”. The disincentives include, “increase in the fee for conducting fitness test and renewal of fitness certificate for motor vehicles more than 15 years old”, “increase in the fitness certification fee for transport vehicles more than 15 years old”, and “Increase in the renewal of registration fee for personal vehicles (non-transport vehicles) more than 15 years old.” The vehicles that are more than 15 years old, will have to pay eight times more for the renewal of their registration. The renewal fee for cars older than 15 years has been fixed at Rs 5000, and that for bikes that are more than 15 years old, at Rs 1000. For bikes and cars that are imported, the renewal fee has been pegged at Rs 10,000 and Rs 40,000, respectively. The fees for renewal of certificate of fitness for public and commercial vehicles, like buses or trucks, older than 15 years, has also been increased to more than eight times.

The voluntary Vehicle Scrapping policy was announced during the Union Budget 2021, with the objective of phasing out old and unfit personal vehicles after 20 years, and commercial vehicles after 15 years, post a fitness test in automated centres. The policy makes it compulsory for heavy vehicles to undergo fitness tests from April, 2022.