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Find Out How the Vehicle Scrappage Policy Will Decide the Life Term of Your Vehicle

The Budget announcement of 2021 had proposed a vehicle scrapping policy. Now, the nation has got a better glimpse on the issue, with the Union Minister for Road Transport and Highways telling the Lok Sabha that it has specified the proposals in this regard.

So, when does your vehicle need to ‘call it a day’? Are there any incentives for you in this vehicle scrappage policy?

If your vehicle is for personal use, then it needs to go for a fitness test after 20 years of its registration. In case of commercial vehicles, this period is 15 years. A vehicle failing the fitness test or failing to get a renewal of its registration certificate may be declared as ‘end of life vehicle’.

What Do the Vehicle Owners Get?

Customers will get scrap value for the old vehicle by the scrapping centre, which is approximately 4-6 per cent of the ex-showroom price of a new vehicle. They are free to go to any scrappage centre in the country irrespective of the registration place of the vehicle.

State governments may be advised to offer a road tax rebate of up to 25 per cent for personal vehicles and up to 15 per cent for commercial vehicles. The vehicle manufacturers have been advised for providing a discount of 5 per cent on purchase of new vehicle against the scrapping certificate. The registration fees may also be waived for purchase of new vehicle against the scrapping certificate.

What Are the Bigger Objectives of this Policy?

According to Minister Nitin Gadkari, the vehicle scrappage policy is a win-win for all stakeholders. It will help improve fuel efficiency, reduce pollution, and increase GST income due to the purchase of new vehicles. It is expected that the policy will lead to an increase in the country’s automobile industry turnover to ₹10 lakh crore from the current ₹4.5 lakh crore.

The minister said that older vehicles pollute the environment 10 to 12 times more than fit vehicles, and it is estimated that around 17 lakh medium and heavy commercial vehicles are older than 15 years.

When Will the Rules May Finally Applicable?

There will be deliberations at various levels on these proposals. Some tentative dates are marked for the implementation. Rules for fitness tests and scrapping centres will come into effect from October 1, 2021. Scrapping of government and PSU vehicles above 15 years of age will be undertaken from April 1, 2022. Mandatory fitness testing for heavy commercial vehicles will come into effect from April 1, 2023.

On a separate issue, the minister also said that the Fastag process will be further simplified within a year, and there will be toll collection through GPS mechanism.