NEW DELHI: Union Minister Nitin Gadkari on Tuesday said that the government is considering a proposal to provide more tax-related concessions on vehicles that are purchased after scrapping old vehicles under the recently launched National Automobile Scrappage Policy.
“The GST revenue of both the Centre and states will rise due to the scrappage policy…I will discuss with the finance ministry on how to provide more (tax-related) concessions under the new vehicle scrappage policy,” said Gadkari while inaugurating Maruti Suzuki Toyotsu, India’s first government-approved scrapping and recycling facility for end-of-life vehicles (ELVs).
The facility, located in Noida, has a scrapping capacity of 24,000 units annually and can scrap a single car in 200 minutes. The minister’s statement comes after there were concerns that the current benefits provided by the government to consumers, to scrap their old and vehicles are not very encouraging.
Under the current scrappage policy, scrapped vehicle owners will not be charged any registration fee on the purchase of a new vehicle, beside 25% waiver on road tax and a scrap value which will be equivalent to 4-6% of the dismantled vehicle. Gadkari said they expect 10 to 12% more automotive sales due to the scrappage policy.