Government: Tax breaks must be granted to vehicles purchased against scrapped vehicles


NEW DELHI: State governments will have to offer a reduction on the road tax, also known as the motor vehicle tax, while registering new vehicles purchased against scrapped vehicles, the Ministry of Transportation said on Tuesday road. The discount should be between 1% and 15% for utility vehicles and 1% to 25% for private vehicles. States can decide on final tariffs.
This change is being made to central motor vehicle rules to encourage people to remove their old and polluting vehicles, officials said. “On the reduction of the road tax, we are introducing the change in the rules. This is not advice, ”Co-Secretary (Transport) Amit Varadan told TOI.
Vehicle scrapping policy will help states earn more revenue, says Gadkari
The Center is empowered under the concurrent list to decide on the principle of taxation, so we have done so within the legal framework. Some states had asked how we were doing this. We shared the legal provision, ”said Co-Secretary (Transport) Amit Varadan.

Union Minister of Road Transport Nitin Gadkari said he was confident in the cooperation of all states in rolling out a vehicle scrapping policy.
“State governments will get more revenue because there will be about a 25-30% increase in new vehicle sales. This will generate more taxes for the States and the Center. This policy will generate more jobs and reduce vehicle pollution. If people are not scrapping old vehicles, they are not buying new ones, ”the minister said.
The government has notified full exemption from registration fees for new vehicles purchased against the scrapping of old ones. The road tax rebate, registration exemption and up to 5% rebate on the cost of the new vehicle by car manufacturers can only be used after production of a valid scrapping certificate. People can also redeem such certificates.


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