Vehicle scrapping policy to offer 5% rebate on new cars: Gadkari

New Delhi: Stating that vehicle scraping policy is a 'win-win' situation for vehicle owners, Union Minister Nitin Gadkari on Thursday announced the much-awaited vehicle scrappage policy in Lok Sabha. As per the new policy, there will be 5 per cent rebate to those buying new cars if they junk their old vehicles.

The voluntary vehicle scrapping policy announced in the Union Budget for 2021-22 provides for fitness test after 20 years for personal vehicles while commercial vehicles would require it after the completion of 15 years.

"The 'Voluntary Vehicle-Fleet Modernisation Programme' or 'Vehicle Scrapping Policy' will offer a rebate of about 5 per cent to buyers on new car purchases in lieu of scrapping of the old. The vehicle manufacturers are advised for providing a discount of 5 per cent on purchase of new vehicle against the scrapping certificate," Road Transport, Highways and MSMEs Minister Gakdari said, adding that this policy would result in increase of about Rs 40,000 crore in GST.

"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, he said that the scrap value for the old vehicle given by the scrapping centre will be approximately 4-6 per cent of ex-showroom price of a new vehicle.

The 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, he said.

In addition, the registration fees may also be waived for the purchase of new vehicle against the scrapping certificate.

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

Efforts are also being made to set up Integrated Scrapping Facilities across India, he said, adding that some of the identified places include Alang in Gujarat,

where it is being planned to develop a highly specialised centre for scrapping among many other potential centres, where different scrapping technologies can be

synergised together.