Ministry Proposes Doubling Scrappage Discount to 50% for Vehicles Below BS-2 Emission Standards.

The Ministry of Transport Proposes Major Tax Exemption for Vehicle Scrappage

The Ministry of Transport, which oversees road transport and highways, has put forward an exciting proposal that could significantly benefit vehicle owners. They aim to double the one-time tax exemption available when purchasing a new vehicle after scrapping older vehicles that comply with BS-2 emission standards or earlier. Currently, the exemption allows for a 25% discount on private vehicles and 15% on commercial vehicles. However, under the new proposal, this exemption could increase to up to 50%.

Why is this step important?

This initiative is crucial for several reasons. First, it focuses on environmental awareness by removing older vehicles that contribute excessively to pollution. By encouraging the scrapping of these vehicles, the government hopes to promote the purchase of new, cleaner cars, thereby modernizing the vehicle fleet across the country.

What does the draft notification say?

On January 24, the Ministry released a draft notification outlining these changes. It states that the proposed 50% discount will apply to all vehicles, whether commercial or private, that fall under the BS-2 standard or earlier. This rule will come into effect for those who decide to scrap their old vehicles and buy new ones. Additionally, the notification indicates that this exemption will also be applicable under the Indian Road Transport Vehicle Rules and any future regulations that may be established.

What is the system now?

Currently, when a private vehicle is scrapped, owners receive a 25% discount on the motor vehicle tax when purchasing a new vehicle. For commercial vehicles, the discount is limited to 15%. The government’s goal is to expedite the removal of older, polluting vehicles, which is why they are planning to increase the discount rate.

If this new proposal is approved, vehicle owners could enjoy a substantial 50% discount in motor vehicle tax after scrapping their old cars that meet the BS-2 standard or earlier. This initiative not only offers financial relief to vehicle owners but also supports a cleaner environment. However, the new scheme will only be fully implemented once the final notification is issued.