Ministry of Road Transport & Highways (MoRTH) on Thursday announced a system of incentives in its vehicle scrapping policy to nudge owners to discard old and polluting vehicles, which have higher maintenance and fuel consumption costs.
MoRTH, in a statement, announced that the states and union territories (UTs) will provide up to 25 per cent rebate on road tax for vehicles that are purchased after scrapping old vehicles under the National Automobile Scrappage Policy.
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, the ministry added.
"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," it said.
According to the ministry, this concession is up to 25 per cent, in case of non-transport (personal) vehicles, and up to 15 per cent, in case of transport (commercial) vehicles.
MoRTH also said that the concession shall be available for up to eight years in case of transport vehicles, and up to 15 years in case of non-transport vehicles.
"There shall be no concession in the motor vehicle tax in case of transport vehicles, after eight years, and, in case of non-transport vehicles, after fifteen years," said MoRTH.
Under the National Automobile Scrappage Policy, launched by Prime Minister Narendra Modi in August 2021, mandatory fitness testing for heavy commercial vehicles is likely to come into effect from April 1, 2023, and for other categories from June 1, 2024, in a phased manner.
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