The Ministry of Road Transport and Highways (MoRTH) has drafted a proposal to increase the motor vehicle tax rebate to 50% for individuals and businesses scrapping vehicles compliant with BS-II or earlier emission standards in India. This initiative aims to accelerate the phase-out of high-polluting vehicles and encourage the adoption of cleaner alternatives.
Proposed Tax Rebate Structure
Currently, the rebate on motor vehicle tax stands at:
- 25% for privately registered vehicles
- 15% for commercial vehicles
Under the new proposal, this rebate will be doubled to 50% for both private and commercial vehicles that are either BS-I-compliant or manufactured before the implementation of Bharat Stage (BS) emission norms.
Eligibility Criteria and Timeline
The BS-I emission standards were introduced in 2000, followed by BS-II in 2002, making eligible vehicles at least 25 years old. This proposal applies to medium and heavy vehicles across private and transport sectors.
Vehicle Scrapping Program
The government’s Voluntary Vehicle Modernization Program (VVMP) seeks to remove outdated, high-emission vehicles from Indian roads. To facilitate this, the government has established Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs) nationwide.
Currently, India has:
- Over 60 RVSFs operating across 17 states/UTs
- More than 75 ATSs in 12 states/UTs
The government plans to expand these facilities to further support the program, ensuring a smoother transition to cleaner mobility.
Kartick Nagpal, President, of Rosmerta Technologies, said:
“The government’s proposal to double the rebate is a welcome move for the industry. It reflects the Ministry’s recognition of the challenges in procuring end-of-life vehicles. This additional incentive is expected to boost volumes for the vehicle recycling sector while reducing acquisition costs for RVSFs. Ultimately, this could lower compliance costs for OEMs under the EPR framework, further strengthening the ecosystem. At Rosmerta Technologies, we are committed to supporting this initiative through our advanced Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs). Such measures will play a key role in accelerating the adoption of sustainable scrapping processes and building a cleaner, greener India.”
Source: www.timesdrive.in
