The Union government has announced the much-awaited vehicle-scrapping policy with the aim of reducing pollution and phasing out old unfit vehicles in the country.
Announcing the details of the voluntary vehicle fleet modernisation programme or the voluntary vehicle scrapping policy, Road Transport and Highways Minister Nitin Gadkari said about 100 scrapping centres would be made operational in the next two years.
According to the policy, more than 20-year-old personal vehicles will be deregistered automatically from 1 June 2024, if they fail in an automated fitness test or their registration certificate is not renewed. Similarly, 15-year plus commercial vehicles will be deregistered from 1 April 2023.
The policy envisages that all government and PSU-owned vehicles that cross 15-year mark from April 2022 onwards would be scrapped mandatorily. Vehicles damaged in fire, riots or any devastation, declared as defective by manufacturers and those confiscated by enforcement agencies would also be scrapped.
Gadkari said the government will issue an advisory to vehicle manufacturers to offer about 5 per cent rebate on new cars that would be offered to buyers on scrapping of old vehicles. He made a statement on the policy in both the Lok Sabha and the Rajya Sabha on Thursday.
“The scheme shall provide strong incentives to owners of old vehicles to scrap old and unfit vehicles through registered scrapping centres, which shall provide the owners with a scrapping certificate,” he said.
Listing the incentives, Gadkari said, “scrap value for the old vehicle given by the scrapping centre will be approximately 4-6 per cent of the ex-showroom price of a new vehicle.”
The state governments will 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, he said.
In addition, registration fees may also be waived for the purchase of a new vehicle against the scrapping certificate. Other components of the policy, which Gadkari said, have been proposed to the Finance Ministry and states, which include proposed lower goods and services tax (GST) for vehicles bought against those scrapped at registered facilities.
To discourage use of vehicles of over 15 years, the Road Ministry has proposed higher renewal registration fees for them.
The ministry has also come out with a draft proposal outlining the setting up of a registered vehicle scrapping facility (RVSF) under which any entity can establish the facilities after approval from the agencies concerned in the states and Union territories.
The draft notification said the government proposes a processing fee of Rs 1 lakh for each RVSF or such fee as may be prescribed by the state or Union Territory government for this purpose.
Besides, an earnest deposit by way of a bank guarantee of Rs 10 lakh each for RVSFs has been proposed to be established, in favour of the designated registration authority or designated officer as notified by the state/Union Territory as a non-interest-bearing security deposit for a period, it said.
The draft notification has proposed disposal of all applications for grant of registration within a period of 60 days from the date of application. The RVSF shall be provided connectivity and access to the VAHAN database of vehicle registration with password-protected user ID.
The proposed guidelines said only such vehicles may be scrapped which have not renewed their Certificate of Registration in accordance with Rule 52 of the CMVR; which have not been granted a certificate of fitness in accordance with Section 62 of the Motor Vehicles Act; or vehicles which have been damaged due to fire, riot, natural disaster, accident or any calamity, following which the registered owner self certifies the same as scrap.
It will also cover vehicles that have been declared obsolete or surplus or beyond repair by the central/state organisations of the government, and have been offered for scrapping; vehicles bought by any agency including RVSF in an auction for scrapping; vehicles which have outlived their utility or application particularly for projects in mining, highways, power, farms etc.
Scrapping centres will keep the records, verify ownership of vehicles to be scrapped by using VAHAN database while scrapping centres can’t scrap stolen vehicles. The RVSF must have necessary cyber security certifications for the IT systems for safe access to the VAHAN database, it added.
The draft notification said the RVSF shall be provided the necessary connectivity to verify the records of the vehicles produced for scrapping with the database of the stolen vehicles, held by NCRB as well the local police. It would be obligatory on the part of the RVSF to carry out such verification before scrapping a vehicle.
The RVSF shall undertake verification of the persons handing over the vehicle for scrapping to determine the bona fide of the vehicle owner or his authorised representative and retain a copy of the same for record for a minimum period of six months, it added.