Home News Vehicle Scrappage Policy | Fine Details

Vehicle Scrappage Policy | Fine Details

By Team ManAndMotor - 20-03-2021 07:31 PM

Nitin Gadkari, Minister of Road Transport and Highways, has released more details about the much-awaited Vehicle Scrappage Policy. For people not in the know, Finance Minister, Nirmala Sitharaman had announced the Vehicle Scrappage Scheme last month while announcing the Budget 2021-22.


1. According to the new Vehicle Scrappage Policy, the scrap value of the old vehicles paid by the scrapping center will have to be equivalent to the 4-6% of the ex-showroom price of the new vehicle. For example – customers can avail up to 60,000 on scrapping old vehicles if the value of the new car is 10 lakh.


2. Adding to it, OEMs will have to give a 5 percent discount on the purchase of a new vehicle in case of a scrapping certificate.


3. State Governments will give up to a 25% road tax rebate on personal vehicles. In the case of commercial vehicles, customers can avail of up to a 15% discount on road tax.



4. The new rules for fitness tests and scrapping centers will be applicable from October 1, 2021. Adding to it, scrapping of Government and PSU vehicles older than 15 years will come into effect from April 1, 2021.


5. To remain relevant, heavy commercial vehicles will have to present a fitness certificate from April 1, 2023. Other vehicles will have to get a fitness certificate from June 1, 2024. Commercial vehicles failed to pass the fitness tests will be de-registered after 15 years, while the private vehicles that are found unfit to run will be de-registered after 20 years. These types of vehicles will be declared as ‘End of Life Vehicle’.


Gadkari has also requested Finance Minister to offer a GST cut for such vehicles. This will further reduce the price of the vehicles for the customers who have scrapped their vehicles. However, Nirmala Sitharaman is yet to make an official statement.

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