Ministry of Road Transport launches Vehicle Scrapping Policy

At present, there are sixty-plus RVSFs across 17 States / UTs and over 75 ATSs across 12 States / UTs operational in the country with many more in the pipeline.

Union Minister for Road Transport & Highways Nitin Gadkari had a detailed interaction with a CEOs’ delegation from the Society of Indian Automobile Manufacturers at Bharat Mandapam on Tuesday in the presence of the Ministers of State of Road Transport and Highways Harsh Malhotra and Ajay Tamta.

This is to promote the scrapping of privately owned Commercial & Passenger Vehicles and replace the old polluting fleet with the less polluting newer fleet. 

Reciprocating the interaction and recognising the importance of fleet modernization and circular economy, multiple commercial and passenger vehicle manufacturers have agreed to offer discounts for a limited period against a Certificate of Deposit (Scrappage Certificate).

Commercial Vehicle and Passenger Vehicle manufacturers have shown a willingness to offer discounts for a limited period of two years and one year respectively.

These discounts will further incentivize the scrapping of End-of-Life Vehicles, thereby ensuring the plying of safer, cleaner and efficient vehicles on the roads.

Commercial Vehicles

Commercial Vehicle Manufacturers—Tata Motors, Volvo Eicher Commercial Vehicles, Ashok Leyland, Mahindra & Mahindra, Force Motors, Isuzu Motors and SML Isuzu, offered discount equivalent to 3% of the ex-showroom price for a commercial cargo vehicle with more than 3.5 tonnes GVW scrapped by the owner within last six months and a discount equivalent to 1.5% of the ex-showroom price for a commercial cargo vehicle with less than 3.5 tonnes GVW scrapped by the owner within last six months.

Discount to be offered to a person buying a vehicle against a traded certificate of deposit of a scrapped commercial vehicle would be equivalent to 2.75% of the ex-showroom price for scrapping a commercial cargo vehicle with more than 3.5 tonnes GVW and a discount equivalent to 1.25% of the ex-showroom price against a traded certificate of deposit for scrapping a commercial cargo vehicle with less than 3.5 tonne GVW.

This scheme may also be considered for buses and vans, the ministry said.

Passenger Vehicles

Passenger Vehicle Manufacturers—Maruti Suzuki India Ltd, Tata Motors, Mahindra & Mahindra, Hyundai Motor India, Kia Motors, Toyota Kirloskar Motor, Honda Cars, JSW MG Motor, Renault India, Nissan India and Skoda Volkswagen India, offered discounts of 1.5% of the ex-showroom price of new car or Rs 20,000, whichever is less, against the passenger vehicle scrapped by the owner in the last six months.

Details of the scrapped vehicle are to be linked in the Vahan system. Companies can voluntarily offer additional discounts on identified models.

Individual Passenger Vehicle Manufacturer may have the liberty to extend this discount only on the identified models, within their vehicle portfolio.

As the car is not getting exchanged but only scrapped, hence between exchange and scrap discount, only scrappage discount will be applicable.

Mercedes Benz India has offered a flat discount of Rs 25,000, which will be over and above all existing discounts.

“These Original Equipment Manufacturers (OEM) discounts are in addition to the scrap value provided by RVSFs to the vehicle owners and existing incentives of Motor Vehicle tax concession, waiver of fee for issuance of certificate of registration and waiver of liabilities by the government under the Vehicle Scrapping Policy linked to the certificate of deposit (CD) on purchase of a new vehicle, applicable in many states,” the ministry said.