MoRTH Drafts Plan For 50% Tax Rebate On New Vehicle Purchases After Scrapping Old Ones

Presently, the rebate stands at-

Under the new proposal, the rebate will be doubled to 50% for both personal and commercial vehicles that are either BS-I-compliant or manufactured before BS emission norms were implemented.

The BS-I emission norms came into effect in 2000, followed by BS-II in 2002. This means eligible vehicles will be at least 25 years old. The proposal extends to medium and heavy vehicles in both private and transport categories.

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The government’s Voluntary Vehicle Modernization Program aims to phase out older, high-emission vehicles. Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs) have been established across the country to facilitate this.

At present, there are more than 60 registered vehicle scrapping facilities (RVSFs) across 17 states/UTs and more than 75 Automated Vehicle Testing Stations (ATSs) across 12 states/Union Territories operational in the country. The government plans to increase the number of these facilities in the future to support the program.

Kartick Nagpal, President, Rosmerta Technologies, said, "The government's proposal to double the rebate is a welcome move for the industry. It reflects the Ministry's recognition of the challenges in procuring end-of-life vehicles. This additional incentive is expected to boost volumes for the vehicle recycling sector while reducing acquisition costs for RVSFs. Ultimately, this could lower compliance costs for OEMs under the EPR framework, further strengthening the ecosystem. At Rosmerta Technologies, we are committed to supporting this initiative through our advanced Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs). Such measures will play a key role in accelerating the adoption of sustainable scrapping processes and building a cleaner, greener India."