States offer tax incentives for scrapping old vehicles
New Delhi, Feb 15, 2023
A dozen states and Union territories have come on board to offer motor vehicle tax or road tax concessions while buying new vehicles in lieu of scrapping old ones. Five states have also notified a one-time waiver of pending liabilities on vehicles older than 15 years which are scrapped at the Registered Vehicle Scrapping Facilities (RVSFs).
These moves are likely to accelerate the phasing out of the old and polluting vehicles.
Officials said Karnataka, Punjab, Madhya Pradesh, Odisha, Jharkhand, Rajasthan, Bihar, Assam, Chandigarh and Mizoram have announced a maximum rebate of 25% of the road tax in case of scrapping personal vehicles and buying new ones against them. These states have also announced the maximum 15% discount on road tax in the case of commercial vehicles.
Uttar Pradesh has announced to offer 15% rebate on road tax on personal and 10% on commercial vehicles while Maharashtra has decided to offer 10% rebate for scrapping both the categories of vehicles and buying new ones.
The discounts can be availed only when an old vehicle is scrapped at an RVSF. “These states and UTs have notified the policy and we expect more states to do so,” said a senior government official.
Officials said five states — Assam, Madhya Pradesh, Maharashtra, Odisha and Mizoram — have also announced the one-time waiver of pending liabilities on old vehicles which are being scrapped at RVSFs. “These steps are going to expedite the formal phasing out of old vehicles. There is also a huge focus on increasing the number of RVSFs across the country,” an official said.
The finance ministry recently earmarked Rs 2,000 crore as special assistance for states, in a move to persuade state governments to scrap vehicles that are older than 15 years and offer road tax concessions to private persons while buying a new vehicle in lieu for retiring their old vehicles.
This assistance or incentive is on a “first come first served” basis and the states will have to achieve some milestones. The recently presented Budget for 2023-24 has provision for extending the ‘incentives for srapping of old vehicles’.
[The Times of India]