Centre not to intervene on scrap value of vehicles, says Nitin Gadkari
- Scrapping of old vehicles offers tax benefits to owners with waiver of registration of new vehicles and motor vehicle tax sops.
The Centre will not intervene in deciding the price of vehicles that are sent for scrapping. Union Minister Nitin Gadkari has said that the price of such vehicles will be decided by the market. During a written reply to the Lok Sabha, Gadkari clarified a fair price for such vehicles cannot be decided by the government as it will depend on the condition of the vehicle being scrapped. The Centre had introduced the vehicle scrappage policy to encourage owners to get rid of vehicles that have reached end of life.
Explaining the reason behind government's reluctance to decide scrap value of a vehicle, Gadkari said the price of scrapped vehicles will depend on a number of factors. For all government-owned vehicles the models have a reserve price determined by the Ministry of Steel. However, the minister said it will not be possible for the Centre to pre-decide the scrap value of a private vehicle without knowing in what condition it has been sent to scrappage facilities. In his reply, the minister said, “There is no intervention by the Government in determination of fair price of private vehicles to be scrapped. The price of these vehicles is decided by the market forces as per the condition of the vehicle to be scrapped."
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Besides vehicle scrapping centres run by the government, the Centre has also urged private entities to set up Reserve Vehicle Scrapping Facility (RVSF). The minister said these units will also be responsible to decide the price of a scrapped vehicle after proper evaluation of its existing condition.
Vehicle scrappage policy: Incentives and tax benefits
To encourage owners of old vehicles, the Centre also offers incentives and tax benefits. In Delhi NCR, owners having diesel cars aged more than 10 years and petrol cars aged more than 15 years are urged to scrap them and buy a new one. These vehicles are considered to have exceeded their permissible age limits to be fit enough to ply on road. For those willing to continue with the old vehicles will need to acquire fresh fitness certificate.
The policy offers incentives and benefits to those who choose to scrap old vehicles. These include waiver of registration fees for new vehicles purchased after showing the Certificate of Deposit issued on scrapping the old vehicle. The policy also offers motor vehicle tax sops to owners choosing to buy a new vehicle. One can avail up to 25 per cent tax benefit for private vehicles and 15 per cent for commercial vehicles.
Old vehicles, especially the ones that have reached end of life, are some of the biggest reasons behind vehicular pollution in India. The Centre has actively undertaken initiative to get rid of these old and polluting vehicles. According to Gadkari, nearly 2,500 such units have been impounded by authorities since the crackdown on old vehicles resumed in October this year.
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