MoRTH Rolls Out Vehicle Scrapping Policy; Carmakers to Offer Discounts Against Scrapping Certificates

To phase out outdated and environmentally harmful cars across India, the Ministry of Road Transport and Highways has unveiled the Voluntary Vehicle Modernisation Program, generally referred to as the Vehicle Scrapping Policy. The programme is currently run by over 60 Registered Vehicle Scrapping Facilities (RVSFs) in 17 states and union territories and 75 Automated Testing Stations (ATSs) in 12 states and territories. During a meeting with a delegation from the Society of Indian Automobile Manufacturers (SIAM), Union Minister Nitin Gadkari emphasised the initiative's objective of replacing outdated, polluting cars with cleaner, eco-friendly cars.

When the programme was first implemented, owners who scrapped their cars (and received a Certificate of Deposit) were eligible for discounts from automakers on new model purchases, waivers of registration fees, and exemptions from road taxes. Additionally, it informed state governments of the possibility of providing a motor vehicle tax concession of up to 25 per cent for non-transport vehicles and up to 15 per cent for transport vehicles. The MoRTH has now announced that all pending liabilities associated with the scrapped vehicle would be waived.

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Several Manufacturers to Offer Significant Discounts

The Ministry of Road Transport and Highways (MoRTH) has stated that several passenger vehicle (PV) manufacturers have agreed to offer buyers discounts for one year against a Certificate of Deposit (CoD) or Scrappage Certificate under the Vehicle Scrapping Policy. These discount offers are intended to promote the scrapping of outdated vehicles, resulting in cleaner, safer, and more effective models on the road.

The Ministry said, 'Individual PV manufacturers may have the liberty to extend this discount only on the identified models, within their vehicle portfolio. As the car is not getting exchanged but only scrapped, hence between exchange and scrappage discounts, only scrappage discount will be applicable.'

In exchange for the car being scrapped by the owner within the last six months, several companies will offer discounts of 1.5 per cent of the ex-showroom price of the new car or Rs 20,000 (whichever is lower). These discounts were given in addition to the scrap value offered by Registered Vehicle Scrapping Facilities (RVSFs) and other government incentives already in place.

Car manufacturers that are offering discounts include Maruti Suzuki India, Hyundai, Tata Motors, Mahindra & Mahindra, Kia India, Toyota, Honda Cars India, JSW MG Motor, Renault India, Nissan India, Skoda Auto India, and Volkswagen India. 

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In an official statement, the Ministry stated that automakers may voluntarily offer extra discounts on specific models and that information about the discarded vehicle will be linked to the VAHAN system.