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Holding on to Old Cars Likely to Get Costly After Vehicle Scrapping Policy Comes into Effect

Representational image. (Photo: Reuters)

Representational image. (Photo: Reuters)

While the cost for getting a fitness certificate for such commercial vehicles will go up by up to 62 times, the fee for renewal of registration of private vehicles will increase by up to eight times.

After the vehicle scrapping policy announced by the Union Budget 2021 on Monday comes into effect, holding on to 15-year-old vehicles will become expensive. While the cost for getting a fitness certificate for such commercial vehicles will go up by up to 62 times, the fee for renewal of registration of private vehicles will increase by up to eight times. Also, states will now impose green tax over and above the road tax that every vehicle owner needs to pay.

The road transport ministry will announce the scrapping policy in the next two weeks. As per the motor vehicle law, renewal of fitness certificate is mandatory annually once it is more than eight years old. On top of this, states can levy a green tax, which can be 10-25 per cent of the annual road tax. This will be in addition to the normal road tax a vehicle owner pays.

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Similarly, in the case of 15-year plus private vehicles, the registration charge would go up for two-wheelers from the current Rs 300 to Rs 1,000 and it would increase from Rs 600 to Rs 5,000 for cars. States can levy green tax on such vehicles for five years, which would be in addition to road tax.

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In both cases, vehicles failing in the automatic fitness test will be de-registered from Vahan, the central database of vehicles. Currently, only seven out of the 25 sanctioned automated fitness test centres are operational and there are only two authorised scrapping centres, including one in Noida.

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The ministry has also been tasked to explore the possibility to come out with voice messages about the benefits of the scrapping policy in the mobile phones of vehicle owners and drivers at petrol pumps, dealers and service centres. The ministry will also come up with measures to prohibit any misuse of policy for scrapping any stolen vehicle.