States to give 25% road tax rebate on vehicles bought post scrapping old ones

The Union Road Transport and Highways Ministry has announced that the National Vehicle Scrappage Policy will come into effect from April next year. Under the policy incentives, states and union territories (UTs) will offer up to 25 per cent concession on road tax for vehicles that are bought after scrapping of old vehicles.

Under the Scrappage Policy, the ministry has proposed to have a system of incentives so as to encourage vehicle owners to their give up and scrap their old and polluting vehicles. “As an incentive for scrapping, concession is stipulated in the motor vehicle tax for a vehicle registered against submission of Certificate of Deposit, which is issued by a Registered Vehicle Scrapping Facility," a notification from the ministry said.

The concession provided is up to 25 per cent for non-transport personal vehicles, and up to 15 per cent, for transport or commercial vehicles. The concession will be available for up to eight years for transport vehicles, and up to 15 years for non-transport vehicles.

The new rules under the National Vehicle Scrappage Policy will be called the Central Motor Vehicles (Twenty fourth Amendment) Rules, 2021, and will come into effect from April 1, 2022. "There shall be no concession in the motor vehicle tax in case of transport vehicles, after eight years, and, in case of non-transport vehicles, after fifteen years," the notification further added.

The notification from the ministry also mentioned that owners of vehicles that are more than 15 years old will have to pay eight times more to renew registration. The policy has fixed ₹5,000 as the renewal fee for cars older than 15 years. Similarly, the fee to renew registration of 15-year old bikes would cost ₹1,000 compared to the current fee of ₹300.

(with inputs from PTI)