Vehicle Scrappage Policy: Now, keeping old cars will cost you more. Details

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Finance Minister Nirmala Sitharaman announced a new vehicle scrapping policy in the Union Budget 2021 on Monday in Parliament. Holding on to 15-year-old vehicles will cost more after this voluntary vehicle scrapping policy comes into effect.

According to a report, the cost of getting a fitness certificate for such commercial vehicles will go up by up to 62 times. On the other hand, the fee for renewal of registration of private vehicles will increase by up to eight times. In the next couple of weeks, the road transport ministry is expected to notify the new vehicle scrapping policy. 

As per the motor vehicle law, renewal of fitness certificate is mandatory annually once it is more than eight years old.  

According to Times of India, sources said, the fitness certificate fee for commercial vehicles that are more than 15 years would increase from the current Rs 200 to approximately Rs 7,500 for cabs and nearly Rs 12,500 for trucks.

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In the case of 15-year plus private vehicles, the registration charge would go up for two-wheelers from the current Rs 300 to Rs 1,000 and it would increase from Rs 600 to Rs 5,000 for cars. 

“All private vehicles need to renew registration after 15 years and subsequently every five years. This is expected to work as a disincentive for owners,” the sources told TOI.

Also, states can levy a green tax, which can be 10-25 per cent of the annual road tax. On the top, states will now impose green tax over and above the road tax that every vehicle owner needs to pay. States can levy green tax on such vehicles for five years, which would be in addition to road tax.

In both cases, vehicles failing in the automatic fitness test will be de-registered from Vahan, the central database of vehicles.

The government has also been tasked to explore the possibility to come out with voice messages about the benefits of the scrapping policy in vehicle owners and drivers mobile phones at petrol pumps, dealers and service centres. The ministry will also come up with measures to prohibit any misuse of policy for scrapping any stolen vehicle.