The government has taken the first step towards the much-awaited scrappage policy but with a twist. As reported by CNBC-TV18 on Jun 21, the government is not looking at mandatory scrappage of vehicles which are older than 15 years of age but has rather created more roadblocks for old automobiles.

In a draft notification issued to make amendments to Central Motor Vehicle Rules, 1989, the ministry has proposed renewal of fitness certificate for old vehicles (over 15 years of age) every six months as against the current period of one year.

For conducting test and the grant and renewal of certificate of fitness for motor vehicles older than 15 years, the ministry has also proposed increased fees.

While the ministry has proposed increase in registration fees for new vehicles as well, the draft notification also seeks to waive this registration fees in case of presentation of a Scrappage certificate of an old vehicle from an authentic scrapping centre.

"It has been provided that the newly purchased Motor Vehicles shall be exempted for the payment of fees for the purpose of issue of registration certificate and assignment of new registration mark subject to condition that motor vehicle is presented for the registration along with the Scrapping Certificate of the previously owned vehicle of same category issued by the authorised scrapping centre/agency and the scrapping certificate not utilised for any other such cases in past," a government note on the draft notification said.

Feedback can be submitted to the draft notification within a period of 30 days.

CNBC-TV18 had exclusively reported on June 21 that the scrappage policy is back in the works but with several changes.

Several rounds of consultation had taken place among various ministries under NITI Aayog's National Mission for Transformative Mobility and the theme of the discussions was that new vehicle sales won't be promoted at the cost of old but there will be more bumps on the road for older vehicles.

The government is also working on a strong IT backbone to ensure genuine transactions and prevent duplicate usage of scrapping certificate.

The Ministry of Road Transport and Highways, Ministry of Environment, Forest and Climate Change and Ministry of Steel have been tasked to work towards proper implementation of the policy under NITI Aayog.

The road ministry is likely to take up proposals of taxation benefits for scrapping centres under Section 35AD of the Income Tax Act or Section 801A/801B of the Income Tax Act and proposal of rationalisation of input tax credit regime under GST for scrapping centres with the finance ministry.

The environment ministry, on the other hand, is likely to formulate draft regulations on Extended Producer Responsibility for vehicles which are towards the end of their lifecycle. Extended Producer Responsibility is a policy approach under which producers are given a significant responsibility – financial and/or physical – for the treatment or disposal of post-consumer products. The road ministry is likely to determine the parameters for the end of life of a vehicle.

The policy is believed to be a part of the Modi government's 100-day agenda.

First Published:Jul 26, 2019 10:23 PM IST