For years, people complained about what to do with their old vehicles. Some continued using them, while others chose to sell them. But now those days are over, as the Government introduced the Vehicle Scrappage Policy.
This policy lays down the framework to get rid of obsolete cars and improve the air quality and road safety.
Now it is mandatory for all vehicle owners to follow the legal requirements of the Vehicle Scrappage Policy, which is why we have listed down the legal requirements every vehicle owner needs to know.
Age Limits and Mandatory Fitness
The Vehicle Scrappage Policy focuses on old, unfit, and polluting vehicles. The legal requirements revolve around two main criteria: age and fitness.
1. Vehicle Age
The policy sets clear timelines for both Commercial and Private vehicles:
• Commercial vehicles are registered for 15 years, after which they have to go through a fitness test and have to be discarded if they don’t work.
• Private vehicles are registered for 20 years. They must also go through a necessary fitness test after this time. They risk being scrapped if they don’t pass the fitness test.
2. The Crucial Fitness Test
This test is conducted at a designated Automated Testing Station (ATS) and is a decisive factor in determining a vehicle’s future. The test is rigorous and evaluates several critical parameters that an aging vehicle often fails to meet:
- Braking Efficiency: Ensuring the vehicle can stop safely under various conditions.
- Engine Performance and Emission: The vehicle must comply with the current and relevant Bharat Stage (BS) emission norms. Old vehicles, particularly those operating under BS-II or BS-III standards, are highly likely to fail this check due to excessive pollution.
- Steering and Suspension: Checking for mechanical wear and tear that compromises control and stability.
- Safety Components: Ensuring lights, wipers, and other crucial safety systems are functional.
The government has drawn a firm line between the unorganized junkyard and the legally compliant recycling center. Under the VSP, a vehicle can only be scrapped at a Registered Vehicle Scrapping Facility (RVSF), which is authorized and regulated by the Ministry of Road Transport and Highways.
What is RVSF?
An RVSF, also known as a Registered Vehicle Scrapping Facility, is a government-certified facility that meets all the legal and environmental requirements. Such as:
- Toxic fluids and battery acid must not contaminate the soil or water, and they must follow all the procedures for the treatment of hazardous materials.
- Technological Capability: To effectively disassemble, crush, and separate materials (steel, aluminum, and plastics), RVSFs need to have all the required machinery.
- Digital Integration: To guarantee prompt and verifiable de-registration, the facility needs to be digitally connected to the Regional Transport Office’s (RTO) Vahan database. The foundation of the entire legal process is this relationship.
Why Should You Use an RVSF?
Using a certified RVSF is very important for reasons such as:
- RVSF has the authority to issue the official Certificate of Deposit (CoD). This is your primary legal proof that the vehicle has been submitted for scrapping.
- CoD from a registered RVSF makes you eligible to enjoy attractive financial benefits and concessions offered under the Scrappage Policy.
- Once you receive the CoD, your legal liability for the vehicle ends. This prevents misuse of the old vehicle’s chassis or engine number for fraudulent activities in the future.
The Documentation and Deregistration Process
The legal process for scrapping a vehicle is designed to be hassle-free for the owner, provided they have the necessary paperwork.
Required Documentation for Scrapping
To initiate the scrapping process at an RVSF, a vehicle owner must furnish the following:
• RC
• Vehicle Identification Number (VIN)/Chassis Number.
• Aadhar Card/PAN Card
• If the owner is not present in person to turn in the car, a power of attorney is necessary.
• Police Clearance Certificate (PCC)
Certificate of Deposit (CoD)
The CoD is the single most important legal document you will receive. It is issued electronically by the RVSF directly to the owner and simultaneously updated in the Vahan database.
The CoD certifies three things:
- The vehicle has been deposited at an authorized RVSF.
- That the vehicle’s registration is permanently cancelled (deregistered).
- The vehicle is eligible for all benefits under the VSP.
Possessing this certificate is the legal key to unlocking all the financial incentives offered by the government and manufacturers.
Financial Incentives
The Scrappage Policy is voluntary, and its success is dependent on providing significant financial incentives that outweigh the cost of maintaining an old vehicle. These incentives are legally guaranteed upon the submission of the CoD.
1. Scrap Value Amount
You will receive a sum of monetary value for the scrap metal recovered from the vehicle. The amount can range from 4% to 6% of the ex-showroom price of the vehicle.
2. Rebate for Road Tax
While purchasing a new vehicle, owners are eligible for a massive rebate on the Road Tax:
- Private Vehicles: Up to 25% rebate on the Road Tax for the new vehicle.
- Commercial Vehicles: Up to 15% rebate on the Road Tax for the new vehicle.
3. Registration Fee Waiver
When you purchase a new vehicle, you will not have to pay the registration fee, as the government has offered a complete waiver.
4. Manufacturer Discounts
Automobile manufacturers are encouraged to offer a discount of up to 5% on the ex-showroom price of the new vehicle purchased against the CoD.
These legally backed financial incentives make the act of scrapping a polluting vehicle not just an environmental necessity, but a compelling economic decision.
Consequences of Non-Compliance
1. High Fees and Penalties
Under the new policy, the fees for the mandatory fitness test and the renewal of registration for old vehicles have been significantly increased. This “Green Tax” mechanism is designed to make keeping an unfit vehicle economically unviable. For example, the renewal of the registration certificate for a private vehicle older than 15 years is now dramatically higher, and the fee for the fitness test itself has also seen a substantial hike.
2. De-Registration and Seizure
If an old vehicle fails the fitness test, it is automatically deregistered. Driving a de-registered vehicle is a serious offense, leading to hefty fines, legal action, and potential seizure of the vehicle by law enforcement agencies. This removes the “choice” for owners of unfit vehicles—scrapping becomes the only legal resolution.
3. Environmental and Safety Risk
Beyond the legal penalties, continued use of an unfit vehicle carries serious risks:
- Increased Pollution: Old vehicles are proven to be 10 to 12 times more polluting than modern ones, directly contributing to India’s worsening air quality.
- Safety Hazards: An old vehicle is prone to mechanical failure, compromising the safety of the driver, passengers, and other road users.