What Is the Scrappage Policy and Green Tax on Older Vehicles?

With rising pollution levels and aging vehicles on Indian roads, the government has introduced the Vehicle Scrappage Policy and Green Tax to encourage responsible vehicle disposal. If you own an old car or bike, understanding how car scrapping and green tax work can help you make the right legal and financial decision.

This guide explains what these policies mean, why they exist, and how they affect vehicle owners.

What Is the Vehicle Scrappage Policy?

The Vehicle Scrappage Policy is a government initiative aimed at phasing out old, polluting, and unsafe vehicles from Indian roads through regulated car scrapping.

Key Objectives of the Policy

• Reduce air pollution and carbon emissions
• Improve road safety
• Promote eco-friendly vehicle recycling
• Encourage replacement with newer, cleaner vehicles

Vehicle Age Criteria (Indicative)

• Private vehicles: 15 years
• Commercial vehicles: 10 years

Vehicle age rules may change based on court orders and state regulations. Always refer to official notifications.

How Does the Scrappage Policy Work?

The process is straightforward and transparent when done through authorized facilities.

Step-by-Step Process

1. Vehicle undergoes a fitness test
2. If it fails, the owner can opt for car scrapping
3. Vehicle is dismantled at a government-approved RVSF
4. Owner receives:

• Certificate of Vehicle Scrapping (CVS)
• Certificate of Deposit (COD)

These certificates are legally required and offer financial incentives.

What Is Green Tax on Older Vehicles?

Green Tax is an additional charge imposed on old vehicles that continue to operate beyond a certain age, especially if they fail to meet emission standards.

Why Is Green Tax Charged?

• Older vehicles emit more pollutants
• They contribute disproportionately to urban air pollution
• The tax discourages prolonged use of outdated vehicles

When Is Green Tax Applicable?

• During vehicle re-registration
• At the time of fitness renewal
• Rates vary by state and vehicle type

In many cases, the green tax amount increases with vehicle age.

What Are the Benefits of Car Scrapping Under This Policy?

Financial Benefits

• Scrap value based on metal weight and market rates
• Certificate of Deposit usable for:
• Road tax rebates (up to 25% in some states)
• Discounts on new vehicle purchases

Legal Benefits

• Permanent RTO deregistration
• End of ownership and liability
• Protection from misuse or penalties

Environmental Benefits

• Safe disposal of hazardous fluids
• Up to 90% material recycling
• Reduced air and noise pollution

Who Should Consider Car Scrapping Immediately?

You should strongly consider car scrapping if:

• Your vehicle is over 15 years old
• It fails the fitness test
• Green tax costs are rising
• The vehicle is non-running or accident-damaged
• You plan to buy a new vehicle soon

Is Car Scrapping Mandatory?

Currently, car scrapping is not mandatory for private vehicles unless:

• The vehicle fails the fitness test
• It is banned by court or regional authority

However, continuing with an old vehicle may become increasingly expensive and restrictive due to green tax and compliance issues.

Why Use Only Authorized Scrapping Facilities?

Only government-approved scrapping centers can:

• Issue valid CVS and COD
• Complete legal RTO deregistration
• Ensure environmentally compliant dismantling

Using unauthorized agents can lead to invalid certificates, legal trouble, and future liabilities.

Final Thoughts

The Scrappage Policy and Green Tax are designed to protect public health, the environment, and vehicle owners themselves. While the green tax allows a temporary extension, car scrapping offers a clean legal exit, financial benefits, and long-term peace of mind.

Making an informed decision today can save money, avoid penalties, and contribute to a cleaner future.