Excise duty benefits, fair value for an old car and OEM discounts proposed under upcoming scrapppage scheme for owners of older cars opting for the scheme.
It has been revealed that the proposed Voluntary Vehicular Fleet Modernisation Policy (V-VMP) by the Government of India that is to be put in place in future seeks to grant excise duty relief for people scrapping their cars under the upcoming scrappage scheme for cars. The proposed scrappage scheme will accommodate cars registered before 2005 and not meeting BS IV emissions norms.
The matter will be discussed by Nitin Gadkari, Minister for Road Transport and Highways, along with his senior officials when they will meet Finance Minister Arun Jaitley on August 24. It has been reported by ET that under this proposition, people who opt for the scrappage scheme for their old car will be required to only pay half the excise duty for their next new car purchase.
There are more benefits proposed for those who scrap their old cars. They will be offered a fair value for their old car being sent in for scrappage while car makers will be required to offer discounts for people applying for the scheme and buying a new car. On an average, this is likely to bring down the cost of new car purchase by around 15 per cent for people trading in their old car via the upcoming scrappage scheme for a new car.
In the first draft of the proposed Voluntary Vehicular Fleet Modernisation Policy released by the Ministry for Road Transport and Highways, The policy recommends complete excise exemption for state transport buses to encourage public transport to shift to newer and higher capacity buses. “The decision of excise exemption is to be taken by the finance ministry. We’ll be pushing for it as there’s no other way to take polluting vehicles off the road,” an official is reported to have commented on the matter.
When the proposed policy is put in place, it is said that vehicular emissions will come down by 25 – 30 per cent and save oil consumption by 3.2 billion litres a year, thereby saving around Rs. 7,000 crore in oil import.
From what has been penned down, it seems that the process to apply for scrappage scheme will be very easy as people will have to submit documents of their vehicle at the recycling centre. After the documents are verified, the owner will get a VVMP certificate and the price of the scrap (old car). The owner then has to provide the VVMP certificate to a new car dealer to avail applicable discount on the new car purchase.
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