Vehicles to be scrapped at registered facility authorised by States, UTs says draft notification

PTI, Mar 19, 2021, 12:13 PM IST

New Delhi: The government on Thursday came out with the much-awaited draft guidelines for setting up a registered vehicle scrapping facility (RVSF) under which any entity can establish the facilities after approval from the concerned agencies in the states and union territories.

As per the draft guidelines, the old vehicles will be scrapped by the registered entities.

Announcing the details of the vehicle scrapping policy, Road Transport and Highways Minister Nitin Gadkari said about 100 scrapping centres would be made operational in the next two years.

”The scrapping of vehicles shall be carried out by a Registered Scrapper by following the procedure outlined … in respect of all ELVs (end of life vehicles), except impounded/ abandoned vehicles,” as per the draft notification.

The draft notification said the government proposes a processing fee of Rs 1 lakh for each RVSF or such fee as may be prescribed by the State or Union Territory government for this purpose.

Besides, an earnest deposit by way of a bank guarantee of Rs 10 lakh each for RVSFs has been proposed to be established, in favour of the designated registration authority or designated officer as notified by the state/union territory as a non-interest-bearing security deposit for a period, it said.

The notification proposed disposal of all applications for grant of registration within a period of 60 days from the date of application.

Such RVSFs can be set up by any person, firm, society or trust in accordance with the law on the consent of the State or Union Territory for scrapping of vehicles, it said.

The rules under which these will be set up will be called the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021.

Seeking suggestion from the stakeholders on the draft rules within 30 days, the notification said it will be applicable once it is notified in the official gazette.

The RVSF shall be provided connectivity and access to the VAHAN database of vehicle registration with a password-protected user ID.

The RVSF must have necessary cybersecurity certifications for the IT systems for safe access to the VAHAN database, it added.

The notification said the RVSF shall be provided with the necessary connectivity to verify the records of the vehicles produced for scrapping with the database of the stolen vehicles, held by NCRB as well the local police.

It would be obligatory on the part of the RVSF to carry out such verification before scrapping a vehicle.

The RVSF shall undertake verification of the persons handing over the vehicle for scrapping to determine the bonafide of the vehicle owner or his authorised representative and retain a copy of the same for the record for a minimum period of 6 months, it added.

The guidelines said only such vehicles may be scrapped which have not renewed their Certificate of Registration in accordance with Rule 52 of the CMVR, 1989; which have not been granted a certificate of fitness in accordance with Section 62 of the Motor Vehicles Act, 1988; or vehicles which have been damaged due to fire, riot, natural disaster, accident or any calamity, following which the registered owner self certifies the same as scrap.

It will also cover vehicles that have been declared obsolete or surplus or beyond economic repair by the central/state organisations of the government and have been offered for scrapping; vehicles bought by any agency including RVSF in an auction for scrapping; vehicles that have outlived their utility or application particularly for projects in mining, highways, power, farms etc.

Under the government’s vehicle scrapping policy, about 5 per cent rebate on new cars would be offered to buyers on scrapping of old vehicles.

”The ‘Voluntary Vehicle-Fleet Modernisation Programme’ or ‘Vehicle Scrapping Policy’ will offer a rebate of about 5 per cent to buyers on new car purchases in lieu of scrapping of the old.

”The vehicle manufacturers are advised to provide a discount of 5 per cent on purchase of new vehicle against the scrapping certificate,” Gadkari said.

He made a statement on the vehicle scrapping policy in both the Lok Sabha and the Rajya Sabha.

”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,” he said.

Listing the incentives, Gadkari said, ”Scrap value for the old vehicle given by the scrapping centre will be approximately 4-6 per cent of the ex-showroom price of a new vehicle.”

The State governments may be advised to offer a road tax rebate of up to 25 per cent for personal vehicles and up to 15 per cent for commercial vehicles, he said.

In addition, registration fees may also be waived for the purchase of a new vehicle against the scrapping certificate.

The voluntary vehicle scrapping policy announced in the Union Budget for 2021-22 provides for fitness test after 20 years for personal vehicles while commercial ones would require it after the completion of 15 years.