The Ministry of Road Transport and Highways (MoRTH) has issued a draft rule proposing that the purchase of any new motor vehicle shall be eligible for a road tax concession against a Vehicle Scrappage Certificate.
- Private vehicles will get up to 25 percent concession on road tax.
- Commercial vehicles will get up to 15 percent concession on road tax.
- Concession only offered if Scrappage certificate is issued within 15 year of registration.
According to the MoRTH circular, this draft rule is slated to come into effect from October 1, 2021.
MoRTH road tax concession proposal
As per the MoRTH proposal, road tax concession of up to 25 percent will be available on the purchase of a new car, if the buyer has a Vehicle Scrappage Certificate for a private vehicle. If the buyer has a certificate for a commercial vehicle, only a concession of up to 15 percent will be offered.
Additionally, the incentive will only be offered if the Vehicle Scrappage Certificate has been issued within fifteen years of the original registration date of the private vehicle. For commercial vehicles, that window is even smaller at eight years from its first registration date.
Vehicle Scrappage policy: other incentives
The above-mentioned road tax concession is just one of the various incentives the government was to implement with the introduction of the vehicle scrappage policy. The policy also includes incentives like advising automakers to provide a discount (roughly 5 percent) to anyone who scrapping their old vehicles. You can head here to read our story on Vehicle scrappage policy: Intended benefits vs possible reality, for a more detailed look on the subject.
Hormazd Sorabjee
Anurag Chaturvedi
