Govt announces guidelines for setting up registered vehicle scrapping facilities

The government has announced draft guidelines for setting up registered vehicle scrapping facilities (RVSF). Under this, any entity - person, firm, society or trust in accordance with law, can establish the facility after getting an approval from the concerned agencies in the states and union territories. All old vehicles are supposed to be scrapped at registered workshops.

Minister of Road Transport and Highways Nitin Gadkari, while announcing the rules under the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility), 2021, also said that around 100 scrapping centres would be made functional in the next two years. "The scrapping of vehicles shall be carried out by a Registered Scrapper by following the procedure outlined," the draft notification for the policy read.

A processing fee of ₹1 lakh for each RVSF or fee as may be prescribed by the state or union territory government will be applicable. Further, the government has proposed an earnest deposit as a bank guarantee of ₹10 lakh for establishment of each RVSF, in favour of the designated registration authority or officer as notified by the state/UT. This will be a non-interest-bearing security deposit for a particular period.

The government notification also proposes that all applications seeking grant of registration should be disposed within a period of 60 days from the date of application. Each RVSF will also be provided with connectivity and access to the VAHAN database of vehicle registration with password protected user ID. RVSFs will also require necessary cyber security certifications for the IT systems for safe access to the VAHAN database.

Any RVSF will also be obligated to first verify if a vehicle being scrapped is stolen or illegal which can be done via the database of the stolen vehicles made available by NCRB as well the local police.

The government has sought suggestions from the stakeholders on the draft rules within 30 days. The rules will be applicable once it is notified in the official gazette.

Gadkari also mentioned that vehicle manufacturers have been advised to provide a discount of 5 per cent on purchase of new vehicle against the scrapping certificate. Further, he said, "Scrap value for the old vehicle given by the scrapping centre will be approximately 4-6 per cent of the ex-showroom price of a new vehicle."

(with inputs from agencies)