States To Offer Up To 25% Road Tax Concession For Vehicles Purchased After Scrapping Old Ones


The Union Road Transport and Highways Ministry on Wednesday mentioned the states and union territories (UTs) will present as much as 25 per cent rebate on street tax for automobiles which are bought after scrapping outdated automobiles below the brand new National Automobile Scrappage Policy.

The ministry in a press word mentioned that within the car scrapping coverage, it’s proposed to have a system of incentives to nudge car homeowners to discard outdated and polluting automobiles.

“As an incentive for scrapping, concession is stipulated in the motor vehicle tax for a vehicle registered against submission of Certificate of Deposit, which is issued by a Registered Vehicle Scrapping Facility. 

“This concession is as much as 25 per cent, in case of non-transport (private) automobiles, and as much as 15 per cent, in case of transport (business) automobiles,” it said.

The press note further said the concession shall be available up to eight years, in case of transport vehicles, and up to 15 years, in case of non-transport vehicles.

The road transport and highways ministry in a notification said that these new rules may be called the Central Motor Vehicles (Twenty fourth Amendment) Rules, 2021, and they shall come into force with effect from April 1, 2022.

“There shall be no concession within the motorcar tax in case of transport automobiles, after eight years, and, in case of non-transport automobiles, after fifteen years,” the notification added.

Joint Secretary in the Ministry of Road Transport and Highways Amit Varadan in August had said that the Centre will soon ask state governments to provide up to 25 per cent rebate on road tax for vehicles that are purchased after scrapping old vehicles under the new proposed scrappage policy.

“As far as street tax (rebate) is anxious, it isn’t an advisory, we’re going to make modifications within the guidelines (to offer street tax rebate of as much as 25 per cent for private automobiles and as much as 15 per cent for business automobiles on shopping for new vehicles on scrapping outdated automobiles),” Varadan had said at a press conference.

He had also emphasised that the central government has the power to decide principles of taxation in the concurrent list.

Union Road Transport and Highways Minister Nitin Gadkari had also said that the issues related to the road tax rebate are a subject under the central government.

Under the National Automobile Scrappage Policy launched by Prime Minister Narendra Modi in August this yr, obligatory health testing for heavy business automobiles is more likely to be in power from April 1, 2023, and the identical will probably be in place in a phased method for different classes from June 1, 2024. 

(PTI)




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