Vehicle Scrapping in India

Vehicles in India need to be scrapped after a certain period, depending on whether they are private or commercial vehicles, to ensure only fit vehicles run on the roads. The Voluntary Vehicle Fleet Modernization Program, commonly known as the Vehicle Scrappage Policy, is a government policy that directs to scrap old vehicles and replace them with newer ones on Indian roads.

Private cars more than 20 years old and commercial vehicles over 15 years old must be scrapped and deregistered.

The aim of this government policy is to create an ecosystem that regularly removes vehicles off the roads once they are unfit and polluting to the environment. This helps achieve a lower carbon footprint in the country, as according to this policy, scrapping of current End-of-Life vehicles (ELVs) helps reduce emissions and, thus, pollution levels by 15%-20%.

Goals of Vehicle Scrappage Policy

• Create an ecosystem where unfit vehicles are replaced to avoid any potential pollution by newer vehicles.
• Ensure road, passenger and vehicular safety.
• Decrease emissions and pollution by scrapping approximately 1 crore vehicles that are not fit.
• Boost auto sales and generate employment in the auto sector.
• Make the Indian scrappage industry organized, transparent and environment friendly.
• Improve the availability of low-cost raw materials for various industries like automotive and electronics industry.

 

Vehicle Scrapping Process  

• As per the policy, all vehicles must pass a certain fitness test in specified time intervals. A vehicle’s registration is linked to the validity of its fitness certificate, which is shared after a fitness test is conducted on the vehicle at authorized Automated Testing Stations (ATSs).
• Registered Vehicle Scrapping Facilities (RVSFs) will be established to promote safe, environment friendly and scientific scrapping of vehicles. As per the Ministry of Road Transport and Highways, they foresee RVSFs to be technologically advanced, transparent and environmentally safe in their operations.
• If a vehicle fails a fitness test, one chance is given to the owner to get the car retested after necessary repairs. However, if the vehicle fails in the retest too, it shall be deemed as an ELV.
• This policy sets and covers two types of vehicles: Commercial Vehicles (CV) and Private Vehicles (PV). It states different regulations for both the categories.

 

Regulations related to Commercial Vehicles

• CVs are required to undergo a fitness test every 2 years for the first 8 years and then annually thereafter.
• Every vehicle that is used for any commercial purpose to get a fitness certificate every 2 years from the day of its registration for a period of 8 years and later every year for it to run on roads.
• The CVs must pass the fitness test conducted by RVSFs to be drivable on Indian roads.

Fees for Conducting Fitness Test & Granting Fitness Certificates for Commercial Vehicles Older than 15-Years

Metric	Vehicle Category	Existing Fees	Revised Fees (Vehicles older than 15 years)
Conducting test of a vehicle for grant or renewal of fitness certificate (for vehicles older than 15 years)	Light Motor Vehicle	INR 600	INR 1,000 (automated testing)
	Medium Goods or Passenger Vehicle	INR 1000	INR 1,300 (automated testing)
	Heavy Goods or Passenger Vehicle	INR 1000	INR 1,500 (automated testing)
Grant or Renewal of Fitness Certificate (For Vehicles Older than 15 years)	Light Motor Vehicle	INR 200	INR 7,500
	Medium Goods or Passenger Vehicle	INR 200	INR 10,000
	Heavy Goods or Passenger Vehicle	INR 200	INR 12,500

Regulations related to Private Vehicles

• PVs must undergo a fitness test after 15 years of its registration.
• To be deemed drivable on Indian roads, every PV must get a fitness certificate upon completion of its 15 years.
• It must pass the fitness test for it to be deemed as a fit vehicle for Indian roads.
• The fitness certificate must be renewed after 15 years. The renewal is valid for 5 years for PVs.

Fees for Conducting Fitness Test & Granting Fitness Certificates for Commercial Vehicles Older than 15-Years

Metric	Vehicle Category	Existing Fees	Revised Fees (Vehicles older than 15 years)
Issue or renewal of certificate of registration	Light Motor Vehicle (LMV) – Non Transport	INR 600 (for new registration and renewal of registration)	INR 600 (New registration) INR 5,000 (Renewal of registration after 15 years)
Conducting test of a vehicle for grant or renewal of fitness certificate (for vehicles older than 15 years)		INR 600	INR 1,000 (Automated Testing)

Standards for Scrapping of Vehicles at RVSFs

Vehicles that meet the following criteria can be scrapped:

• Vehicles that have not renewed their Certificate of Registration in accordance with Rule 52 of the CMVR, 1989.
• Vehicles which have not been granted a certificate of fitness in accordance with Section 62 of the Motor Vehicles Act, 1988.
• Vehicles which have been damaged due to fire, riots, natural disasters, accidents or any calamity, following which the registered owner self certifies the same as scrap.
• Vehicles that have been declared obsolete or surplus or beyond repair by the Central/State Organizations of the government and have been offered for scrapping.
• Vehicles bought in auction for scrapping the vehicles by any agency including RVSF.
• Vehicles which have outlived their utility or application particularly for projects in mining, highways, power, farms, factories, airports, etc. as may be self-certified by the owner.
• Manufacturing rejects, test vehicles, prototype, vehicles damaged during transportation from vehicle Original Equipment Manufacturers (OEMs) to dealers or unsold/unregistered vehicles, as may be certified by the Vehicle OEM.
• Auctioned, impounded and abandoned vehicles by any Enforcement Agency.
• Vehicles voluntarily offered to an RVSF for scrapping, at the discretion of the owner.

 

Benefits of Vehicle Scrapping Policy

• Reduced air pollution and better air quality due to lesser unfit vehicles on the roads.
• Increase in the demand for new vehicles as older vehicles shall be removed after a certain period.
• Increase in job opportunities in the automobile sector, like in new vehicle scrapping centers.
• Newer vehicles will be more advanced, which shall be much safer than older unfit vehicles.
• Increased activity and higher revenue in the recycling industry.
• Vehicle owners may enjoy tax benefits on scrapping old, unfit vehicles.
• Better price for workable parts like wheels and tyres.
• Post scrapping the older vehicle, the owner may receive a 4-6% discount on the ex-showroom price of a newer vehicle.
• Registration fee for the new vehicle is waived after you declare the Certificate of Deposit.
• Vehicle owners may receive concession on the road tax on the new vehicle from the state government.
• Vehicle manufacturers have been requested to offer a 5% discount on buying a new vehicle against the Certificate of Deposit. You get this is over and above your vehicle’s scrap value.

 

Points to Remember

• The government has through numerous notifications shared the rules for recognition, regulation and control of automated testing stations, guidelines for registration and functions of vehicle scrapping facility, etc.
• Fitness testing for Heavy Commercial Vehicles is proposed to be mandated only through Automated testing Stations from 1st April 2023.
• Fitness testing is proposed to be mandated at Automated Testing Stations in phases from 1st June 2024 for all other classes of CVs and PVs.

 

Conclusion

Considering how older vehicles may cause more emissions and be significantly unsafe for driving compared to newer ones, it is quite advantageous to scrap older vehicles once they have completed a certain period. Besides, owners can enjoy numerous benefits such as tax reliefs and significant discounts while purchasing a new vehicle if they decide to scrap an older one.