The Delhi government is planning to give tax exemption on scrapping old vehicles. The government has sent a proposal to Lieutenant Governor VK Saxena for approval.
The Delhi government is planning to give tax exemption on scrapping of old vehicles. The government has sent a proposal to Lieutenant Governor VK Saxena for approval. The government has decided to give exemption in motor vehicle tax for registration of new transport and non-transport vehicles. Provided that a certificate of deposit is submitted for the old vehicle handed over for scrapping at the Registered Vehicle Scrapping Facility (RVSF). The Delhi government has prepared a proposal in this regard, which is allowed under the Vehicle Scrapping Policy of the Ministry of Road Transport and Highways notified in 2021.
Delhi Transport Minister Kailash Gehlot said, “The aim of this policy is to encourage scrapping of old, polluting vehicles and promote the use of new, clean vehicles. By giving tax exemption, we want to make it easier for vehicle owners to switch to more eco-friendly options.”
The Transport Minister’s Office said that the proposal is now pending for the approval of Lieutenant Governor (LG) VK Saxena. Which states that only vehicles scrapped at the registered vehicle scrapping facility will be eligible for exemption.
How much tax exemption on which vehicle
For non-transport vehicles, the exemptions include a 20 percent reduction in motor vehicle tax for new petrol, CNG or LPG vehicles and a 15 per cent reduction for new diesel vehicles. Meanwhile, for transport vehicles, the exemptions include a 15 per cent reduction in motor vehicle tax for new petrol, CNG or LPG vehicles and a 10 per cent reduction for new diesel vehicles.
Discount not to exceed 50 percent of scrap value
However, in both cases, the total motor vehicle tax exemption will not exceed 50 percent of the scrap value. For example, if the scrap value is Rs 50,000, the 20 per cent discount should not exceed Rs 25,000. Currently, car registration fees in Delhi range from 4 percent to 12.5 per cent of the vehicle’s ex-showroom price. The process for availing exemptions will be established and circulated among transport department officials after a notification is issued following LG’s approval.
Vehicle Scrapping Policy
The Delhi government’s proposal is based on the Ministry of Road Transport and Highways’ Vehicle Scrapping Policy 2021, which advises state governments to provide road tax rebate of up to 25 percent for personal vehicles and up to 15 percent for commercial vehicles. The initiative is aimed at encouraging old vehicle owners to scrap unusable vehicles through registered centres. As these old vehicles contribute significantly to pollution and road safety risks.
NGT decision
As per the orders of the National Green Tribunal (2015) and the Supreme Court (2018), no vehicle older than 15 years can be driven on Delhi roads. While for diesel vehicles, the limit is 10 years. The aim of these rules is to reduce vehicles with older emission standards.
Owners of scrapped vehicles get compensation based on factors such as vehicle weight, current metal prices and condition. Typically, about 65 per cent of the vehicle’s weight is considered to be steel. Delhi has eight registered vehicle scrapping units, all located outside the city due to pollution.
All eight registered vehicle scrapping units are located outside Delhi due to pollution.
You can gift scrapping certificate
An official said that the scrapping certificate is valid for three years from the date of issue. “If a person buys a new vehicle within three years from the date of scrapping the vehicle, the certificate of scrapping can be used to get a discount on vehicle registration,” the official said.
The scrapping certificate can also be traded. “If a person wants to gift the scrapping certificate to someone or sell it to someone, that will also be allowed,” the official said.