The RTO has laid down rules for scrapping old vehicles in India. As per the norm, cars that are older than 15 years cannot be used. Though they can be transferred to a new state for re-registration, it is a hassle. Instead, one can scrap the car. The concerned Ministry i.e. The Union Ministry of Road Transport and Highways had given time till November 15 for stakeholders, including general public, to make comments or suggestions on the guidelines.
NGT’s ruling and Government’s Guidelines on Car Scrapping:
- The aim behind these proposed changes is claimed to be a bid to promote the adoption of electric vehicles for various uses;
- The Union Ministry of Road Transport and Highways (MoRTH) has recently released the ‘Draft Guidelines for Setting up, Authorisation and Operation of Authorised Vehicle Scrapping Facility (AVSF).’
- These guidelines are for establishing vehicle scrapping units only. However, currently, there are neither any fiscal incentives nor stringent regulatory requirements which would force vehicle owners to dispose-off old vehicles.
- The guidelines apply to vehicle owners, automobile collection centres, existing automobile scrapping and recycling facilities and recyclers of all types of automotive waste products. The guidelines provide granular details on the land requirements, criteria for scrapping of vehicles, scrapping procedures, required audits, certificates and finances.
- The National Green Tribunal (NGT) noted that the number of ‘end of life vehicles’ will be over 21 million by 2025. Approximately nine million vehicles, of which 75% are two-wheelers, will be due for scrapping by next year, the NGT noted.
- Currently, this process is only voluntary.
- Further, the government can allow for exemption of additional fees such as road tax and registration fees, for all new vehicles purchased against a “certificate of vehicle scrapping” as discussed in these guidelines.
- The government is also looking at these scrapping centres to create employment in the country, with each centre requiring around 25 people.
Car Scrapping in India
- Car scrapping is not an organized activity like the sale of used cars. National Green Tribunal in its order has banned the use of cars that are older than 15 years in Delhi. The Regional Transport Offices (RTOs) have stopped re-registering these vehicles. Until now, there has not been any uniform policy for old vehicles. The impact of the National Green Tribunal order may be detrimental to car owners, as they may not be aware of the formalities of dealing with an aged vehicle.
- Car owners have the option to sell or transfer their vehicles to a neighboring state before their Registration Certificate (RC) expires. It is important that this is done before the expiry of the RC, as the RTO will not renew the RC after the car completes 15 years. When a car is transferred to another state, it will have to be re-registered at the new RTO, and this registration has to be updated in the records of the old RTO. Otherwise, there is always a risk of the car being used for illegal activities. Car scrapping is an option in front of a car owner who is not keen on transferring the vehicle to another state.
Benefits to Scrap Old Commercial Vehicles:
The policy proposed that the owners of vehicles scrapped will be liable to receive the following incentives:
- Half the excise duty and road tax for a replacement vehicle
- Discounts from auto manufacturers
- Fair value for the scrapped vehicle
(These discounts are expected to bring down the cost of purchase of a new vehicle by about 15%. At the recycling centre the vehicle owner will be provided a certificate that will have to be submitted at the dealership for availing the incentives.)
- The government has proposed certain amendments to the Central Motor Vehicle Rules.
- Proposal includes scrappage scheme for vehicles that are 15 years or older.
- Fitness certificate renewal for vehicles that are 15 years or older to be reduced to six months.
- Increased fee for fitness tests proposed for medium and heavy motor vehicles – INR 1,200 [USD 16 approx.] for manual and INR 2,000 [USD 27 approx.] for automatic vehicles.
- Fee for new vehicle registration and renewal of registration for medium and heavy vehicles to be set at INR 20,000 [USD 278 approx.] and INR 40,000 [USD 557 approx.], respectively.
- Registration fee for new imported vehicles with four or more wheels to be fixed at INR 20,000 [USD 278 approx.] and renewal of registration fee to be set at INR 40,000 [USD 557 approx.].
Judicial pronouncements with regard to petrol and diesel vehicles:
- In 2015, the National Green Tribunal (NGT) had banned the plying of petrol vehicles older than 15 years and diesel vehicles older than 10 years in the National Capital Region (NCR);
- It also banned the parking of 15-year-old vehicles in any public area;
- On Oct 29, 2018, the Supreme Court endorsed the NGT order and directed that such vehicles be impounded;
- Further, in 2019, the NGT had issued a series of orders directing the Delhi-NCR Government to cancel the registration of 10-year-old diesel vehicles;
- Recently, the Supreme Court has admitted an appeal from the Central Government seeking to vacate the NGT’s order by which NGT had refused to lift the ban on diesel vehicles on NCR Roads.
The following contentions have been raised by the Centre in its Appeal:
- The petition was filed in the Supreme Court, which said that the ban was affecting the weaker sections of the society economically, which needs to be taken for a closer look;
- The Centre has pleaded that defence fueled diesel vehicles, school buses, tractors, and private vehicles should be exempted from the blanket ban;
- The Centre sought immediate stay of the Tribunal decision as such an order would cause economic hardship to the owners of the vehicles whose very livelihood depends on these vehicles. Further, it would dissuade the potential customers to buy diesel car as compared to petrol cars thus discriminating citizens based on the type of fuel, which is arbitrary;
- The Centre has submitted that the power to fix the age of the vehicle lies with the Central Government and provision of cancellation of registration has been laid down in the Motor Vehicles Act; it was further contended that the Tribunal order violated Section 55 of Motor Vehicles Act.
- The Centre argued that diesel vehicles have higher fuel efficiency which leads to 10 to 15 per cent lower emission of carbon dioxide as compared to petrol vehicles.