Government: Tax breaks must for vehicles bought against scrapped ones – Times of India

NEW DELHI: State governments will have to offer a discount on road tax, also known as motor vehicle tax, while registering new vehicles bought against scrapped ones, the road transport ministry said on Tuesday. The discount will have to be between 1% and 15% for commercial vehicles and from 1% to 25% for private vehicles. The states can decide the final rates.
This change is being made in the Central Motor Vehicle Rules to encourage people to retire their old and polluting vehicles, officials said. “On discount in road tax, we are introducing the change in the rules. It’s not an advisory,” joint secretary (transport) Amit Varadan told TOI.
Vehicle-scrapping policy will help states earn more revenue, says Gadkari
The Centre is empowered under the concurrent list to decide the principle of taxation and so we have done this under the legal framework. Some states had asked how we were doing this. We have shared the legal provision,” joint secretary (transport) Amit Varadan said.

Union road transport minister Nitin Gadkari said that he was confident of all states cooperating in rolling out vehicle scrapping policy.
“The state governments will get more revenue as there will be around 25-30% increase in sales of new vehicles. This will generate more taxes for the states and the Centre. This policy will generate more jobs, reduce vehicular pollution. If people won’t scrap old vehicles, they won’t buy new ones,” the minister stated.
The government has notified the complete waiver of registration fee for new vehicles bought against scrapping old ones. The discount in road tax, waiver in registration and discount of up to 5% on the cost of new vehicle by vehicle manufacturers can be availed only after producing a valid scrapping certificate. People can also trade such certificates.