20% discount on car registration for those scrapping old vehicles in Delhi

The proposal stipulates that only vehicles scrapped at a registered vehicle scrapping facility will be eligible for the concession.

The Delhi government announced a concession of up to 20% in motor vehicle tax on the registration of new transport and non-transport vehicles for buyers who scrap their old vehicles and submit scrapping certificates at the time of registration, the office of Transport Minister Kailash Gahlot shared on Friday. Delhi government has prepared a proposal regarding the concession which is permitted under the Vehicle Scrapping Policy of the Ministry of Road Transport & Highways notified in 2021, they added.

Delhi has eight registered vehicle scrapping units, all located outside Delhi due to pollution. (HT Archive)

“This policy aims to encourage the scrapping of old, polluting vehicles and promote the use of newer, cleaner vehicles. By offering tax concessions, we hope to make it easier for vehicle owners to transition to more environmentally friendly options,” transport minister Kailash Gahlot said.

The proposal, now awaiting approval from lieutenant governor (LG) VK Saxena, stipulates that only vehicles scrapped at a registered vehicle scrapping facility will be eligible for the concession, the transport minister’s office said on Friday.

For non-transport vehicles, the concession includes a 20% reduction in the Motor Vehicles Tax for new petrol, CNG, or LPG vehicles and a 15% reduction for new diesel vehicles. Meanwhile, for transport vehicles, the concession includes a 15% reduction in the Motor Vehicles Tax for new petrol, CNG, or LPG vehicles and a 10% reduction for new diesel vehicles.

However, the total motor vehicle tax concessions shall not exceed 50% of the scrap value in both cases. For instance, if the scrap value is ₹50,000, the 20% concession should not exceed ₹25,000. Currently, car registration charges in Delhi range between 4% to 12.5% of the ex-showroom price of the vehicle. The process of availing the concession will be established and circulated among transport department officials after the notification is issued following LG’s approval, transport officials said.

The Delhi government’s proposal is based on the 2021 vehicle scrapping policy by the Ministry of Road Transport & Highways, which advises state governments to offer a road-tax rebate of up to 25% for personal vehicles and up to 15% for commercial vehicles. This initiative aims to encourage owners of old vehicles to scrap unfit vehicles through registered centers, as these older vehicles significantly contribute to pollution and road safety risks.

According to orders issued by the National Green Tribunal (2015) and the Supreme Court (2018), no vehicle over 15 years can operate on Delhi roads, with a 10-year limit for diesel vehicles. These regulations aim to reduce vehicles with outdated emission standards.

Vehicle owners receive compensation for scrapped vehicles based on factors like the vehicle’s weight, current metal prices, and condition. Typically, around 65% of the vehicle’s weight is considered steel. Delhi has eight registered vehicle scrapping units, all located outside the city due to pollution considerations.

Delhi has eight registered vehicle scrapping units, all located outside Delhi due to pollution.

An official stated that the scrapping certificate remains valid for three years from its issuance date. “If a person buys a new vehicle within three years from the date of getting the vehicle scrapped, the certificate of scrapping can be used for availing discount on registration of the vehicle,” the official said.

The scrapping certificate can also be traded. “If a person wants to gift the scrapping certificate to someone or sell it to someone, that will also be allowed,” the official added.