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States to offer 15% concession on road tax on new vehicle purchase after scrapping older vehicle

The Union Road Transport and Highways Ministry has said on Wednesday that commercial vehicle owners will get a 15 % concession on the purchase of new vehicles after scrapping their old vehicles. The ministry has said that all the States and Union Territories will give a 15% rebate on the purchase of the new vehicle. This will give incentive for the vehicle owners to scrap their old vehicles and buy new vehicles.

For this, the vehicle owners will have to scrap their old vehicles from government-recognized scrapping centers. Recently the government launched the National Automobile Scrappage Policy for reducing the number of old vehicles on the road. The aim of this policy is to motivate vehicle owners to scrap their old vehicles who fail to pass a fitness test. For this, the age of the commercial vehicles has been fixed at 10 years. The age of the private vehicle, on the other hand, has been fixed at 15 years.

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The ministry in the press note said – “As an incentive for scrapping, concession is stipulated in the motor vehicle tax for a vehicle registered against submission of Certificate of Deposit, which is issued by a Registered Vehicle Scrapping Facility.”

The concession for the private vehicles, on the other hand, will be 25% for the purchase of the new vehicle. “This concession is up to 25 per cent, in case of non-transport (personal) vehicles, and up to 15 per cent, in case of transport (commercial) vehicles,” the press note said.

The new rules will come into effect from April 1, 2022, onwards. The ministry has also said that to get this concession, the transport vehicle must be of 8 years. The age of the non-commercial vehicles to get concession on new purchase is of 15 years. The press note said – “There shall be no concession in the motor vehicle tax in case of transport vehicles, after eight years, and, in case of non-transport vehicles, after fifteen years.”

Joint Secretary in the Ministry of Road Transport and Highways, Amit Vardhan, in this regard said – “As far as road tax (rebate) is concerned, it is not an advisory, we are going to make changes in the rules (to provide road tax rebate of up to 25 per cent for personal vehicles and up to 15 per cent for commercial vehicles on buying new cars on scrapping old vehicles).”

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