Vehicle scrappage policy may be sent for to the Cabinet for approval next week: Sources

The proposed vehicle scrappage policy that seeks to do away commercial vehicles that are more than 20 years old will become a reality soon. Sources close to the development informed Zee Business's Sameer Dixit, "The scrappage policy aimed at getting 20-year old commercial vehicles off the roads will be sent to the Union Cabinet next week for its approval." Significantly, going into the details of the srappage policy, the official said that 20 years old vehicles include trucks, buses, tempos and autos. 

According to the policy, the approval will pave way for mandatory disposal of commercial vehicles, like trucks, autos, buses and tempos among others, that are 20 years old from April 1, 2020, coinciding with the implementation of the BS-VI norms. It also says that better reward or incentives will be given to those who will go ahead to scrap their 20-year-old vehicle. 

The sources also said that the Original equipment manufacturers (OEMs) have been requested to give a discount certificate to the beneficiaries so that they may encash the same at the time of purchase of new commercial vehicles.  The OEMs can offer a discount of about 5 per cent against the scrapped vehicle. 

According to the sources, a proposal, that provides GST benefits to the beneficiary by reducing GST rates at the time of purchase of new commercial vehicles, will be sent to the GST Council. In addition, the GST council will be taking up the proposal for consideration after 2 months, during the next GST council meet. 

Simultaneously, Ministry of Steel is also working closely with road transport ministry to set up scrappage units in the country. 

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Road Transport Ministry Official said that first scrappage unit has already been set up in Noida by Mahindra and Mahindra while Tata Motors is already in talks to set up its scrappage unit in Gurugram.