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Consumers to get 5 percent rebate on new cars with scrappage policy

Tuhin Guha Updated: March 08, 2021, 09:33 PM IST

More details have been announced revolving around the scrappage policy proposed during the 2021 Union Budget. In a move that should incentivise more vehicle owners to take up this voluntary scheme, the Ministry of Road Transport and Highways has announced that owners who scrap their vehicles will be eligible for a 5 per cent rebate on new vehicle purchases.

Vehicle Scrappage Policy – the complete picture – all you need to knowPresently vehicles are scrapped on our streets

More details on how this will be implemented are expected to follow in the soon, when the government is expected to put forth this policy in its entirety. As per the scrappage policy which will be implemented April 2022 onwards, personal vehicles over 20 years old and commercial vehicles over 15 years old would undergo automated fitness tests. Vehicles not meeting the prescribed norms would be taken off the streets.

This development comes after the MoRTH approved the proposed vehicle scrappage policy a few weeks ago which said all government-owned vehicles that are more than 15 years old will be taken off the streets.  A more far-reaching development for road users is the proposed green tax policy being approved alongside the scrappage scheme. As per this proposal, transport vehicles older than 8 years could be taxed from 10 to 25 per cent of the road tax. For personal vehicles, the green tax could be levied on vehicles older than 15 years.

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