National Vehicle scrappage policy and Incentives on new vehicle purchase

In a Gazette notification, under Vehicle scrappage policy, MoRTH has issued the list of incentives and disincentives to discard the old and polluting vehicles.

1. Incentive under Vehicle scrappage policy – Waiving off the Registration fee of new vehicle, by producing ‘Certificate of Deposit (CoD)’ of old vehicle by any RVSF (Registered Vehicle Scrapping Facility).
2. Dis-Incentive under Vehicle scrappage policy –
   1. Fee increase for conducting fitness test and renewal of fitness test, for vehicles more than 15 years old.
   2. Fee increase for fitness certification for transport vehicles more than 15 years old.
   3. Fee increase for RC (registration certificate) renewal for personal (Non-transport) vehicles, more than 15 years old.

Concessions or discounts in Motor vehicle tax for a vehicle registered against CoD issued by RVSF from 1st April 2022:

The Govt. has proposed the concessions in Motor vehicle tax for a vehicle registered against ‘Certificate of Deposit’ issued by Registered Vehicle Scrapping Facility. It was supposed to come into effect from 1st April 2022.

Type of Vehicle	Concessions or rebate	Time-Period of Concessions or Rebate
Non-Transport (Personal) vehicles	Up to 25 %	Up to 15 Years
Transport (Commercial) Vehicles	Up to 15 %	Up to 8 Years

Fees of new registration certificate and renewal of registration certificate of private vehicles:

Type of Vehicle	New Registration Fees of Private vehicles	Renewal of Registration Fees of Private vehicles
Motorcycle	Rs. 300	Rs. 1,000
3-wheeled or Quadricycle	Rs. 600	Rs. 2,500
Light motor vehicle	Rs. 600	Rs. 5,000
Medium goods or passenger vehicle	Rs. 1,000	NA
Heavy goods or passenger vehicle	Rs. 1,500	NA
Imported motor vehicle (2 or 3 wheeled)	Rs. 2,500	Rs. 10,000
Imported motor vehicle (4 or more wheeled)	Rs. 5,000	Rs. 40,000
Any other vehicle not mentioned above	Rs. 3,000	Rs. 6,000

Note 1: Additional fee of Rs. 200 shall be levied if the certificate of registration is a smart card type issued or renewed in Form 23A.
Note 2: In case of delay in applying for renewal of certificate of registration, an additional fee of Rs. 300 for delay of every month or part thereof in respect of motor cycles and Rs. 500 for delay of every month or part thereof in respect of other classes of non-transport vehicles shall be levied.

Fees of new registration certificate and renewal of registration certificate of Commercial vehicles (Transport):

Type of Vehicle	New Registration Fees of commercial vehicles	Renewal of Registration Fees of commercial vehicles
Motorcycle	Rs. 500	Rs. 1,000
Three wheeled or Quadricycle	Rs. 1,000	Rs. 3,500
Light motor vehicle	Rs. 1,000	Rs. 7,500
Medium goods or passenger motor vehicle	Rs. 1,300	Rs. 10,000
Heavy goods or passenger motor vehicle	Rs. 1,500	Rs. 12,500

Fees of renewal of Fitness certificate for motor vehicles older than 15 years:

Type of Vehicle	Charge or Fees of Fitness Test Renewal
Motorcycle	Manual – Rs. 400, Automated – Rs. 500
3-wheeled or light motor vehicle or Quadricycle	Manual – Rs. 800, Automated – Rs. 1,000
Medium goods or passenger motor vehicle	Manual – Rs. 800, Automated – Rs. 1,000
Heavy goods or passenger motor vehicle	Manual – Rs. 1,000, Automated – Rs. 1,500

Benefits and targets of Vehicle scrappage policy in India:

Prior to the Gazette notification of 4th October 2021, the Prime Minister had launched the National Vehicle Scrappage Policy at Investor Summit in Gujarat on 13th Aug’21. What the PM highlighted about this Vehicle Scrappage Policy, the top 10 important points about Vehicle Scrappage Policy are:

1. Unfit and polluting vehicle, about 10 million in India, if removed, will be safer for road and better for environment.
2. The unfit and polluting vehicle will be given ‘End of Life Vehicle’ certificate. The fitness of vehicle is related only to fitness, not the age of vehicle.
3. The commercial vehicles over 15 years older and Personal vehicles older than 20 years will be eligible for scrapping.
4. Mandatory fitness testing of heavy commercial vehicle (HCVs) will be from 1st April 2023 and mandatory fitness testing of personal vehicle and other commercial vehicles will be implemented from 1st June 2024.
5. On scrapping old and unfit vehicle, the discount of about 5% will be given on purchasing new vehicle and discount on road taxes will also be given.
6. Due to this scrappage policy, new vehicle sales will increase, resulting in additional GST collection of 30,000 to 40,000 crore, as per transport minister.
7. There will be infrastructure needed for Automated test centres and Registered Vehicle Scrapping Facility (RVSF) to provide fitness and scrap activities in safe manner, in all the districts of India on PPP model.
8. Its aim is to create a viable circular economy, which means the product is designed for durability, re-use and recyclability.
9. It will help the whole auto sector and modernize the vehicle fleet.
10. Overall, it will attract investments of about Rs. 10,000 crore.

Criteria for scrapping of vehicles at RVSF in details:

The detailed Criteria for scrapping of vehicles at RVSF (Registered Vehicle Scrapping Facility) are:

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Vehicle scrappage policy proposes the following points:

1. De-registration of commercial vehicles in Vehicle scrappage policy in India:

1. Registration of commercial vehicles is linked to the validity of fitness certificate.
2. Commercial vehicles will undergo fitness test every 2 years for first 8 years and then after annually.

Criteria of scrapping of Commercial vehicles in Vehicle scrappage policy in India:

1. For commercial vehicles, the primary criteria of scrapping is based on the ‘fitness of vehicles’ through Automated Fitness Centres.
2. Criteria to determine commercial vehicle fitness will be primarily based on tests like emission tests, braking test, safety equipment among many other tests which are as per the Central Motor Vehicle Rules, 1989.
3. A commercial vehicle failing the fitness test may be declared as ‘End of Life Vehicle’ (ELV).

2. De-registration of Private vehicles in Vehicle scrappage policy in India:

1. First registration of Private vehicles (PV) is valid for 15 years.
2. After 15 years of Private vehicles, valid fitness certificate is necessary for renewal, for 5 more years.
3. It is proposed that Private Vehicles be de-registered after 20 years if found unfit or in case of a failure to renew registration certificate. If the private vehicles failed in fitness test, the vehicle will be declared as ‘End of Life Vehicle’ (ELV).
4. As a disincentive measure, increased fees for fitness certificate and fitness test may be applicable for commercial vehicles 15 year onwards from the date of initial registration. Means, after 15 years, the charges of getting fitness certificate and fitness test will be higher.

Criteria of scrapping of Private vehicles in Vehicle scrappage policy in India:

1. For Private vehicles, primary criteria of scrapping is based on the ‘Non-Renewal of Registration’ of vehicles.
2. A Private vehicle failing to get a renewal of its registration certificate may be declared as ‘End of Life Vehicle’.

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3. De-registration and scrapping of Government and PSU vehicles in vehicle scrappage policy in India:

1. All vehicles of the Central Government, State Government may be de-registered and scrapped after 15 years from the date of registration.
2. All vehicles of the Municipal Corporation, Panchayats, State Transport Undertakings may be de-registered and scrapped after 15 years from the date of registration.
3. All vehicles of the Public Sector Undertakings and autonomous bodies with the Union and State Governments may be de-registered and scrapped after 15 years from the date of registration.

4. Incentives offered to owners of old vehicles for scrapping old and unfit vehicles:

1. Scrap Value amount for the old vehicle given by the scrapping centre, which is approximately 4-6 % of ex-showroom price of a new vehicle.
2. All the vehicle manufacturers are also advised for providing a discount of 5% on purchase of new vehicle against submission of “Certificate of vehicle scrapping” given by RVSF.
3. The concession in the motor vehicle tax shall be of up to 25%, in case of non-transport vehicles against submission of “Certificate of vehicle scrapping” given by RVSF. This concession will be available up to 15 years from the date of first registration.
4. The concession in the motor vehicle tax shall be of up to 15%, in case of transport vehicles against submission of “Certificate of vehicle scrapping” given by RVSF. This concession will be available up to 8 years from the date of first registration.
5. The registration fees may also be waived for purchase of new vehicle against the scrapping certificate given by the scrapping centre RVSF.

Where to go to scrap the old, unfit or defective vehicles?

1. Registered Vehicle Scrapping Facility (RVSF) and Integrated Scrapping Facilities will be set up across India for scrapping purposes of the old, unfit or defective vehicles.
2. The owners of old vehicles will go to any of these registered scrapping centers to scrap old and unfit vehicles.
3. Any person can go to any Registered Vehicle Scrapping Facility (RVSF) across India.
4. These centers will provide the owners with a ‘scrapping certificate’ which will be used to get the various kinds of incentive while purchasing new vehicle.

1. Registered Vehicle Scrapping Facility (RVSF) across India:

The Ministry of Road Transport and Highways will promote setting up of Registered Vehicle Scrapping Facility (RVSF) across India. The Govt. will encourage public and private participation for opening up of such Scrapping centres.

2. Integrated Scrapping Facilities for old vehicles across India:

It is being planned to develop a highly specialized centre for scrapping the old vehicles among many other potential centres, where different scrapping technologies can be synergized together. One such facility is identified in Alang in Gujarat among many such centres.

RVSF (Registered Vehicle Scrapping Facility) Registration and Functions of vehicle scrapping facility rule by MoRTH:

The Motor vehicles rule 2021 regarding Registration and Functions of vehicle scrapping facility was published on 25th Sep 2021 via Gazette notification. It lays down the procedure for establishment of Registered Vehicle Scrapping Facility (RVSF). These will apply to all vehicles and their last registered owners, Automobile collection centres, Automotive Dismantling, Scrapping and Recycling Facilities and recyclers of all types of automotive waste products.

‘Automated Fitness Centres’ for testing of vehicles and providing Fitness certificate:

1. The Ministry shall promote the setting up of many Automated Fitness Centres across India on a PPP (Public-Private Partnership) model by state government, private sector, automobile companies etc.
2. To avoid conflict of interest, operators of Automated Fitness Centres shall only provide testing facility and shall not provide repair or sale of spare services.
3. These Automated Fitness Centres should have adequate space for test-lane, IT servers, parking and free movement of vehicles.

How to get appointment for Fitness certificate of old vehicle at Automated Fitness Centres?:

1. Appointment for fitness centres to get Fitness certificate may be booked online.
2. Fitness certificate and Test reports shall also be generated online.

Proposed Vehicle Scrapping Policy timeline (Tentative):

1. Scrapping of Government and PSU vehicles above 15 years of age: 1st April 2022
2. ‘Renewal of certificate of fitness’ or mandatory fitness testing for Heavy Goods Vehicles / Heavy Passenger Motor Vehicles (Transport): 1st April 2023
3. ‘Renewal of certificate of fitness’ or mandatory fitness testing for Medium Goods Vehicles / Medium Passenger Motor Vehicles and and Light Motor vehicles (Transport): 1st June 2024
4. Mandatory Fitness Testing for personal vehicles: 1st June 2024

So, it’s a long road ahead, but better late than never. This Vehicle Scrapping policy will certainly boost the environment around us. The expenditure on fuels saved may be used for social welfare schemes. While on one hand the new vehicle sales will give a boost to automobile sector, on the other hand replacing old vehicles with new one will provide safety and enjoyment to the buyers.

It’s a win-win situation all the stakeholders be it manufacturers, sellers, drivers, pedestrians and nation in broad way. It will bring investment and generate employments too. So, we as a nation must embrace this policy and Govt. should also act as a pro to make the whole process smooth.

List of authorised scrapping center or scrappers in Delhi:

Scrapping Procedure of vehicle and forms to fill at RVSF (Registered Vehicle Scrapping Facility):

• Form – 2 : APPLICATION FOR VEHICLE SCRAPPING
• Form – 2A : UNDERTAKING BY APPLICANT AT THE TIME OF VEHICLE SUBMISSION
• Form – 2B : UNDERTAKING BY RVSF AT THE TIME OF VEHICLE SUBMISSION
• Form – 2C : CERTIFICATE OF DEPOSIT
• Form – 2D : TRANSFER CERTIFICATE OF DEPOSIT

The scrapping of vehicles shall be carried out by an RVSF (Registered Vehicle Scrapping Facility) in respect of all End-of-Life Vehicles, by the following procedure, namely: –

i. The registered owner shall apply digitally on Vahan as per Form-2 to the RVSF or the designated Collection Centre for deposit and further treatment of the vehicle. The RVSF and the designated Collection Centre shall also act as facilitation centres to support citizens with digital application of Form-2.
ii. Vehicles impounded by an enforcement agency shall be handed over to the RVSF, if they meet the criteria
for vehicle scrapping as per rule (8).
iii. The RVSF shall verify the records of the vehicles produced for scrapping with the database of the stolen
vehicles held by National Crime Records Bureau through the Vahan portal.
iv. The Registered Vehicle Scrapping Facility shall also digitally verify through the Vahan portal –
a. that the hire-purchase, lease or hypothecation agreement in the certificate of registration of a motor
vehicle required under sub-section (1) of section 51 of the Act has been duly discharged for the concerned vehicle,
b. that there are no pending dues on the vehicle, and
c. that the vehicle has not been blacklisted
If the vehicle fails any of these checks, the owner shall not be allowed to submit the digital application as per Form-2.

v. The following documents shall be uploaded along with Form-2 by the registered owner for verification by the RVSF –
a. copy of the Permanent Account Number card of the owner;
b. cancelled cheque of the bank account of the owner;
c. letter of authorization on stamp paper for the authorized representative as per para 5 of Form-2, applicable if the vehicle is not to be submitted by the owner
d. identity proof of the authorized representative (if applicable) such as passport, voter card, Aadhar card, driving license or photo identity card issued by the State Government or the Central Government;
e. address proof of the owner such as electricity bill, water bill, land line telephone bill or piped cooking gas bill etc; and
f. digital photograph of the owner or authorized representative with the End-of-Life Vehicle
g. an undertaking, as per para 4 of Form-2 from the owner acknowledging that all information furnished in digital Form-2 application is true as per his knowledge

vi. Once the digital application as per Form-2 is submitted on Vahan, it shall be sent digitally to the regional
transport office for no dues for vehicle scrapping as per rule 58A of CMVR.
vii. On receiving the no dues for vehicle scrapping from the regional transport office, the RVSF shall accept the digital application as per Form-2 and inform the owner to submit the vehicle for scrapping. If the no dues for vehicle scrapping is not provided by the regional transport office, the RVSF cannot accept the application for scrapping.
viii. The owner or his authorized representative shall submit the vehicle along with the original certificate of
registration to the RVSF and sign a digital undertaking as per Form-2A. The RVSF shall also sign a digital
undertaking as per Form-2B. In case of no action by the vehicle owner after acceptance of digital application
as per Form-2 by the RVSF, the application shall expire along with the no dues for vehicle scrapping as per Rule 58A of CMVR. The RVSF shall digitally remit or pay by an account payee cheque, the agreed consideration for the vehicle and obtain a receipt for the same from the owner or his authorized representative for record.
ix. The RVSF shall deface or punch the certificate of registration in the presence of the owner or his authorized representative and issue a digitally signed Certificate of Deposit in Vahan, as per Form 2C, as evidence of acceptance of vehicle for scrapping.
x. The RVSF established in a State may accept and scrap the vehicles registered in any of the State or Union
Territory under the jurisdiction of any Registration Authority.
xi. The whole process shall be seamlessly linked with VAHAN on pan India basis irrespective of the location of any vehicle registering authority.
xii. The Certificate of Deposit shall be a necessary and sufficient document for the owner to avail incentives and benefits for purchase of a new vehicle as may be declared from time to time. The validity of this certificate shall be 2 years from the date of issuance.
xiii. The Certificate of Deposit shall be electronically tradeable. The transfer Certificate of Deposit shall be
generated on the trading platform for each new owner as per Form 2D. The Certificate of Deposit once
utilised shall be marked “Cancelled” in the Vahan database by the regional transport office or dealer
providing the benefits to the bearer of the said certificate.
xiv. The regional transport office/dealer registering the new vehicle purchased against the Certificate of Deposit shall verify and authenticate the Certificate of Deposit digitally.
xv. The RVSF shall facilitate the process of transmission of original certificate of registration (defaced or
punched) along with Certificate of Vehicle Scrapping to road transport or regional transport office, in the
state of registration of the vehicle, to get the vehicle registration cancelled as per rule 52B of CMVR.
xvi. The RVSF shall have the cut piece of the chassis number in safe custody for a period of six months from the date of issue of Certificate of Vehicle Scrapping issued under rule 11.
xvii. The RVSF shall maintain digital scanned copy of all documents for a period of ten years for record and
examination during inspection.
xviii. The RVSF shall ensure that removal or re-cycling or disposal of hazardous parts of the scrapped vehicle is done as per CPCB guidelines for Environmentally Sound Management of End-of-Live Vehicles and AIS129.
xix. Vehicles shall not be scrapped until the fuel, oil, antifreeze, and other gases, fluids etc. are drained and
collected in certified standard containers.
xx. A digital register of vehicles scrapped shall be maintained in Form-3.”

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Disclaimer: Kindly verify from official website of MoRTH in case of any confusion.