New policy makes it costly to keep old cars

03 Feb 2021

NEW DELHI: Holding on to 15-year-old vehicles will become an expensive affair once the voluntary vehicle scrapping policy is rolled out from next year. 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 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. Sources said the fitness certificate fee for commercial vehicles that are more than 15 years would increase from the current Rs 200 to approximately Rs 7,500 for cabs and nearly Rs 12,500 for trucks.

Scrapping policy: Vehicles failing fitness test to be removed from central database

As per the motor vehicle law, renewal of fitness certificate is mandatory annually once it is more than eight years old. “Hiked fee will kick in once such vehicles are of 15 years. Paying such a high charge every year will discourage people to keep their old vehicles,” said a source.

On top of this, states can levy a green tax, which can be 10-25% of the annual road tax. This will be in addition to the normal road tax a vehicle owner pays.
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. “All private vehicles need to renew registration after 15 years and subsequently every five year. This is expected to work as a disincentive for owners,” the source said.
In both cases, vehicles failing in the automatic fitness test will be de-registered from Vahan, the central database of vehicles.
While the government is ready to launch the policy, the biggest challenge is the lack of infrastructure to implement it. 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.
At a meeting on creating ecosystem for phasing out of unfit and polluting vehicles which was chaired by PM Narendra Modi on January 14, the transport ministry was urged to encourage vehicle manufacturers to develop automatic fitness test centres with “appropriate safeguards” and to come out with a complete business model with guidelines for development of such centres and scrapping centres.
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.