Registration fee waiver for new cars, 25% rebate on road tax: Gadkari unveils vehicle scrapping policy

Vehicle owners scrapping their old vehicles, could get “strong incentives” including a 25 per cent rebate on road-tax for personal vehicles, and 15 per cent for commercial vehicles, a 5 per cent discount on purchase of new vehicle against the scrapping certificate, among others, Union transport minister Nitin Gadkari said on Thursday.

Gadkari unveiled the much-awaited Voluntary Vehicle-Fleet Modernization Program or “Vehicle Scrapping Policy” which is aimed at creating an eco-system for phasing out of unfit and polluting vehicles, in the Lok Sabha.

Consumers will also get scrap value for the old vehicle given by the scrapping centre, which is approximately 4-6 per cent of ex-showroom price of a new vehicle. In addition, the registration fees may also be waived for purchase of a new vehicle against the scrapping certificate.


“The objectives of the policy are to reduce population of old and defective vehicles, achieve reduction in vehicular air pollutants to fulfill India’s climate commitments, improve road and vehicular safety, achieve better fuel efficiency, formalize the currently informal vehicle scrapping industry and boost availability of low-cost raw materials for automotive, steel and electronics industry,” Gadkari said.

Unfit commercial vehicles be de-registered after 15 years; Private vehicles be de-registered after 20 years

-Scrappage Policy

The criteria for a vehicle to be scrapped is primarily based on the fitness of vehicles through Automated Fitness Centres in case of commercial vehicles and Non-Renewal of Registration in case of private vehicles, Gadkari said.

The criteria has been adapted from international best practices after a comparative study of standards from various countries like Germany, UK, USA and Japan, he added.

A vehicle failing the fitness test or failing to get a renewal of its registration certificate may be declared as End of Life Vehicle, as per the proposed policy. Criteria to determine vehicle fitness will be primarily emission tests, braking, safety equipment among many other tests which are as per the Central Motor Vehicle Rules, 1989.

The policy proposes that commercial vehicles be de-registered after 15 years in case of failure to get the fitness certificate. 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.

The centre also proposed that private vehicles be de-registered after 20 years if found unfit or in case of a failure to renew registration certificate. As a disincentive measure, increased re-registration fees will be applicable for private vehicles 15 year onwards from the date of initial registration.

The rules for fitness tests and scrapping centres will come into effect 1st October this year onwards, while scrapping of government and PSU vehicles above 15 years of age will be in effect 01st April 2022 onwards. The mandatory fitness testing for heavy commercial vehicles will be in effect 1st April 2023 onwards, and the mandatory fitness testing for other categories will come in a phased manner 1st June, 2024 onwards.