Vehicle Scrapping Policy Is Out – Strong Incentives Announced


Union Minister Nitin Gadkari has announced the vehicle scrappage policy, which offers “strong incentives” for scrapping old vehicles

The much-awaited vehicle scrappage policy has finally been revealed by Union Transport Minister Nitin Gadkari. Under the new policy, people can get benefits for scrapping their old vehicles, including a rebate on road tax when purchasing a new car. For passenger vehicles, the rebate will be up to 25 per cent, and for commercial vehicles, it will be up to 15 per cent.

The registration fee upon the purchase of a new vehicle can also be waived against the scrapping certificate, and automakers have been advised to hand out discounts of 5 per cent to buyers against the certificate. Most importantly, customers will get the scrap value of their old vehicle will be approximately 4 to 6 per cent of the ex-showroom price of the new vehicle.

The scrappage policy also states that the fee for renewal of RC and fitness certificate for old vehicles will be increased, as a disincentive measure. Any private vehicle or commercial vehicle will be declared as ‘End of Life’ if it fails the fitness test, or if the owner fails to get a registration renewal on time. Additionally, a green tax will be levied by states on the old vehicles.

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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,” said Nitin Gadkari.

The scrapping centres will maintain records of all the scrapped vehicles, and the ownership of the cars will be verified via the VAHAN database before scrapping. Stolen vehicles are not allowed to be scrapped. An owner is free to take their vehicle to any scrapping centre across the country, regardless of the place of registration of the vehicle in question.


Vehicles damaged in a fire, riot, or any other calamity, will automatically qualify for scrapping. Similarly, vehicles declared to be damaged by the manufacturers, confiscated by law enforcement, or which have served 15 years as a government or PSU-owned transport, will be scrapped.

The new rules for the fitness test centres and scrapping centres will come into effect from 1st October 2021. However, the scrapping of 15-year-old government and PSU-owned vehicles, along with mandatory fitness testing for heavy commercial vehicles, will begin on 1st April.