Jul 28, 2023

Why Scrapping Your Vehicle is a Good Option?

In the 2023-24 Union Budget, the Finance Minister Ms Nirmala Sitharaman laid special emphasis on the vehicle scrapping policy that was introduced in the 2021-2022 Budget allocating funds to replace vehicles that are older than 15 years. To further the goal of greening the Indian economy, the Budget allocates funds to scrap old vehicles of the Central government and the State Governments will also be supported in replacing their old vehicles and ambulances. 

What is the Vehicle Scrapping Policy?

The policy aims to phase out unfit and polluting vehicles in India. It sets up an automated system to scrap any unfit vehicles, including bikes, cars, and other commercial vehicles. Under this policy, any vehicle that is more than 15 years old and does not pass the vehicle fitness test, will be considered as an end-of-life vehicle (ELV) and will be scrapped. The fitness test is a detailed inspection of the vehicle that determines its road worthiness and whether the particular vehicle is increasing environmental pollution. The test can be conducted through any registered automated testing station. The validity of the test is for five years. All the laws and regulations under the policy will come under the purview of the Ministry of Road Transport and Highways (MoRTH)

What are the Vehicle Categories under the Policy?

  • Private Vehicles like cars and bikes for personal use – These will undergo a fitness test after 15 years and if failed, will be scrapped. 
  • Commercial Vehicles like buses and trucks – These will undergo a fitness test after 15 years and if failed, will be scrapped. 
  • Government Vehicles owned by the Central and State Governments – If they are more than 15 years old, they will be scrapped. 
  • Vintage Vehicles – Since these vehicles are not used regularly they are currently exempted from this policy. 

When will the fitness tests at authorised Automatic Testing Stations start?

All Heavy Commercial Vehicles – from 1st April 2023

Commercial and Private Vehicles– from 1st June 2024

If a vehicle fails the fitness test, the owner can either opt for scrapping the vehicle or get it repaired to pass the fitness test. A green cess of 10 to 15% can be levied on the road tax for older cars even after they have passed the fitness test. The validity of the fitness test is five years, after which the vehicles have to undergo the test again.

How do I Get My Vehicle Scrapped?

  1. When your vehicle completes 15 years, visit a vehicle scrapping centre near you. You can find information about your vehicle on the VAHAN database. 
  2. Submit the required documents such as the RC, your PAN Card, a proof of address, bank account details (where the amount after scrapping will be deposited), a crossed cheque, and in case the owner of the vehicle has deceased, their death/ succession certificate. 
  3. A fitness test will be conducted on the vehicle. If it fails, the recycler will start removing the parts of the vehicle to dismantle the vehicle.
  4. The remaining parts can be recycled, reused or sold.
  5. Upon completion of scrapping, the centre will issue you a Certificate of Destruction. 
  6. You can use this certificate to de-register your vehicle at your respective Regional Transport Office (RTO). 

What are the Benefits of Getting My Vehicle Scrapped?

Any vehicle owner who opts for this policy will be entitled to the following benefits: 

  1. A discount of 4-6% on a new vehicle’s ex-showroom cost, when purchased after scrapping an old vehicle
  2. The government will offer 25% concession on road tax to such vehicle owners
  3. Upon declaration of the Certificate of Deposit, the registration fee for the new vehicle will be waived. Certificate of Deposit means the certificate issued by the registered Vehicle Scrapping Facility to recognise the transfer of ownership of the vehicle from the registered owner to the registered scrapper for further treatment. 
  4. The vehicle manufacturers will also provide a 5% discount on new vehicles upon producing the Certificate of Deposit. 


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