Vehicle Scrapping Policy : Most Questions Answered

 

 

Dear Shri Gadkariji ,

My last E-Mail to you in the matter of ( proposed ) VEHICLE  SCRAPPAGE  POLICY , was :

Vehicle Scrapping Policy ………………………………..[ 03 Feb 2021 ]

 

In that e-mail, I had raised 17 QUESTIONS which required clarifications, for satisfactory implementation of the policy, whenever announced

You announced that policy yesterday

Many thanks for,

Ø  >   Providing clear answers to MOST ( but not ALL ) of the questions raised by me

          in my last e-mail

Ø  >   Incorporating a number of SUGGESTIIONS which I made in my earlier 18 E-

          MAILS , starting first on 27 March 2016 

With regards

Hemen Parekh  /  hcp@RecruitGuru.com  /  19 March 2021

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SOURCES :

Ø  Vehicle scrappage policy may come with tax breaks   /   Business Line  /  19 March

Ø  Government announces voluntary scrappage scheme for vehicles, Gadkari seeks GST rebate  /  Business Today / 19 March

Ø  Certificate to incentives, govt gives scrappage policy details  /  Hindustan Times  /  19 March    

 

POLICY HIGHLIGHTS :

[ A ] ………. Process

Ø  A Vehicle older than 20 years, if found unfit or registration certificate is not renewed, will be de-registered

Ø  Registered owners to handover such vehicles to a Registered Vehicle scrapping Facility, with certificate of the vehicle’s registration, their PAN details and other documents

Ø  Scrappers to verify records of the vehicle from the database of stolen vehicles and issue a Certificate of Deposit, mandatory for the owner to avail incentives

Ø  The certificate once used will be stamped “ Cancelled “ by the agency

Ø  Government will maintain a database of the vehicles scrapped every year

[ B ]…………Incentives for Vehicle Owners

Ø  Scrap Value

          #  4-6 % of ex-showroom price of new vehicle to be given to the owner by the Scrapping Centre

Ø  Tax Rebate

         #   States may be advised to offer a road-tax rebate of up to 25 %  for Personal Vehicles and up to 15 % for Commercial Vehicles

Ø  Discount on New Vehicles

          #   Vehicle Manufacturers will be advised to give 5 % discount on new vehicles against a scrapping certificate

Ø  Fee waiver

          #    Registration fees may also be waived for purchase of new vehicle against the scrapping certificate

VEHICLE POPULATION STATISTICS :

Ø  Medium and Heavy COMMERCIAL VEHICLES

#  Older than 15 years without any valid FITNESS certificate

    17  lakhs

Ø  Light Motor Vehicles

#  Older than 20 years…………………………………………. 51  lakhs

#  Older than 15 years( but less than 20 years ).…34  lakhs 

Ø  Average Age

#   Commercial Vehicles……………………………. 10 + years

#   Private Vehicles…………………………………….  10 – 15 years

SHRI GADKARIJI SAID :

Ø  It is proposed that commercial vehicles be deregistered after 15 years in case of failure to get the fitness certificate. As a disincentive measure, increased fees for fitness certificate and fitness test may be applicable for Commercial vehicles 15 years onwards from the date of initial registration

Ø  It is proposed that private vehicles be deregistered after 20 years if found unfit or in case of a failure to renew registration certificate. As a disincentive measure, increased re-registration fees will be applicable for private vehicles 15 years onwards from the date initial registration

Ø  It is being proposed that all vehicle of the Central Government, State Government, Municipal Corporation, Panchayats, State Transport Undertakings, Public Sector Undertakings and autonomous bodies with the Union and State Governments may be de-registered and scrapped after 15 years from the date of registration

Ø  The scrapping policy will lead to a new investment of around Rs 10,000 crore and create 35,000 jobs. The policy will cover an estimated 5.1 million ( 51 lakh ) light motor vehicle ( LMV : mostly cars ) that are above 20 years of age, while another 3.4 million ( 34 lakh ) LMVs are above 15 years. It will also cover 1.7 million ( 17 lakh ) Medium and Heavy motor vehicles ( trucks, buses, commercial vans), that are above 15 years, and currently without valid fitness certificates

Ø  The scheme shall provide strong incentives to owners of old vehicles to scrap old and unfit vehicles through registered scrapping centres, which shall provide the owners with a scrapping certificate

INDUSTRY  REACTIONS :

Ø  Maruti Suzuki Chairman, Shri R C Bhargav :

Policy is unlikely to help increase vehicle sales in the short term, as the implementation process and the creation of requsite infrastructure will take time

Nothing can happen in the next 3 years. However, one of the results of the policy will be that it will result in the creation of a RECYCLING INDUSTRY which will generate investments and employment

Why should a person be rewarded for scrapping an unfit vehicle ?

Current Policy Guidelines are not adequate. Fitness needs to be certified more frequently.

Ø  SIAM ( Society of Indian Automobile Manufacturers ) spokesperson :

SIAM will work on this front with the government . Mandatory scrapping of 15 + years old government vehicles from 01 April 2022, is a step in the right dirction

SIAM would work together on the scheme in greater detail with the ministry on issues such as ,

#   The best way to expedite TESTING INFRASTRUCTURE in a sustainable and scalable manner

#   The possibility of starting the fitness testing much earlier in the life cycle of the private vehicle as is done in developed countries

#   The scope of mandatory fitness based de-registration vs voluntary incentive/dis-incentive based scrapping and incentives for

     encouraging scrappage

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