Vehicle Scrappage Policy in India (2021)

Complete Guide to the Government of India's Vehicle Scrappage Policy

The Vehicle Scrappage Policy, officially known as the Voluntary Vehicle-Fleet Modernization Program (V-VMP), was launched by the Government of India on 13 August 2021. The policy aims to phase out old, unfit, and highly polluting vehicles while encouraging the use of safer, cleaner, and fuel-efficient vehicles.

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Unlike a compulsory age-based ban, the policy is primarily fitness-based. This means a vehicle is recommended for scrapping if it fails the prescribed fitness test or if the owner voluntarily chooses to scrap it through a Government Authorized Registered Vehicle Scrapping Facility (RVSF).

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The policy promotes scientific vehicle recycling, reduces environmental pollution, improves road safety, and supports the circular economy by recovering valuable materials such as steel, aluminium, copper, plastics, and rubber.

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Objectives of the Vehicle Scrappage Policy

The Government introduced this policy with several important objectives:

• Reduce air pollution caused by old and unfit vehicles.

• Improve road safety by removing unsafe vehicles from roads.

• Encourage owners to replace older vehicles with modern, fuel-efficient vehicles.

• Promote scientific and environmentally friendly recycling of vehicles.

• Increase the availability of recycled steel and other raw materials.

• Formalize India's vehicle recycling industry through Government Authorized RVSFs.

• Reduce dependence on imported scrap metal.

• Support sustainable economic growth and employment in the recycling sector.​

 

Which Vehicles Are Covered?

The policy applies to both private and commercial vehicles.

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Private Vehicles

• Registration is generally valid for 15 years.

• After that period, the vehicle may continue to be used if it successfully renews registration and passes the required fitness tests.

• Vehicles that fail the fitness test or are declared unfit are recommended for scrapping.

 

Commercial Vehicles

Commercial vehicles are subject to periodic fitness certification under applicable transport rules. Vehicles that fail the mandatory fitness test or are declared unfit may be scrapped through an authorized RVSF.

The policy focuses on vehicle fitness, not age alone.

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What is an Automated Testing Station (ATS)?

An Automated Testing Station (ATS) is a Government-recognized facility where vehicles undergo computerized fitness inspections.

The ATS evaluates several safety and emission parameters, including:

• Brake performance

• Suspension

• Steering system

• Headlights

• Emission levels

• Underbody inspection

• Structural integrity

• Speedometer accuracy

• Noise levels

If a vehicle fails these prescribed standards and is not brought into compliance, it may be declared unfit and become eligible for scrapping.

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What Happens After a Vehicle Is Declared Unfit?

Once a vehicle is declared unfit or the owner voluntarily decides to scrap it:

1. The owner contacts a Government Authorized Registered Vehicle Scrapping Facility (RVSF).

2. Vehicle ownership and documents are verified.

3. The scrapping request is processed through the VAHAN Portal.

4. The vehicle is collected and transported to the RVSF.

5. The vehicle is dismantled scientifically.

6. Hazardous materials are safely removed and disposed of.

7. Recyclable materials are recovered.

8. Government-recognized digital certificates are issued.

 

What is a Registered Vehicle Scrapping Facility (RVSF)?

An RVSF is a Government-authorized facility licensed to:

• Receive End-of-Life Vehicles (ELVs)

• Verify vehicle ownership

• Process scrapping applications through the VAHAN Portal

• Dismantle vehicles scientifically

• Recover recyclable materials

• Dispose of hazardous waste safely

• Issue Government-recognized scrapping certificates

Choosing an authorized RVSF ensures your vehicle is scrapped legally and responsibly.

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Certificate of Deposit (CoD)

Once your vehicle is accepted by an authorized RVSF, the Certificate of Deposit (CoD) is generated through the VAHAN Portal.

The CoD:

• Is digitally generated.

• Is Government recognized.

• Acts as proof that your vehicle has been handed over for legal scrapping.

• May be used to claim eligible incentives on the purchase of a new vehicle, where applicable.

 

Certificate of Vehicle Scrapping (CVS)

After the vehicle has been dismantled, the RVSF issues the Certificate of Vehicle Scrapping (CVS).

This certificate confirms that:

• The vehicle has been permanently dismantled.

• The scrapping process was completed by an authorized RVSF.

• The vehicle has been removed from active use in accordance with the prescribed procedure.

 

Benefits Available to Vehicle Owners

Owners who voluntarily scrap their vehicles through an authorized RVSF may receive benefits such as:

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Certificate of Deposit (CoD)

A Government-recognized certificate that can help claim eligible benefits while purchasing a new vehicle.

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Registration Fee Waiver

The registration certificate fee for a new vehicle may be waived when registering it against a valid Certificate of Deposit, subject to applicable rules.

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Motor Vehicle Tax Concession

States and Union Territories may provide concessions on motor vehicle tax for vehicles purchased against a valid Certificate of Deposit. Under the Central notification, concessions can be up to 25% for non-transport vehicles and up to 15% for transport vehicles, subject to implementation by the respective State or UT.

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Better Resale Value Through Organized Scrapping

Owners receive payment for the scrap value of their vehicle through an authorized and transparent process.

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Environmental Benefits

Scientific vehicle recycling helps:

• Reduce air pollution.

• Lower greenhouse gas emissions.

• Recover steel, aluminium, copper, plastics, and rubber.

• Prevent contamination from oils, batteries, coolants, and other hazardous materials.

• Reduce mining and consumption of virgin raw materials.

• Support sustainable manufacturing.

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Economic Benefits

The policy contributes to the economy by:

• Creating employment in the recycling sector.

• Increasing demand for new vehicles.

• Reducing dependence on imported scrap.

• Improving availability of recycled raw materials.

• Supporting India's circular economy.

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Why Choose an Authorized RVSF Like Omzee Car Scrapper?

At Omzee Car Scrapper, we provide complete assistance throughout the vehicle scrapping process.

Our services include:

• Free Vehicle Evaluation

• Doorstep Vehicle Pickup

• Complete Documentation Assistance

• VAHAN Portal Processing

• Certificate of Deposit (CoD)

• Certificate of Vehicle Scrapping (CVS)

• Transparent Pricing

• Instant Bank Payment

• Environment-Friendly Scientific Vehicle Recycling

• Full Compliance with Government Guidelines

Our experienced team ensures that every vehicle is processed legally, securely, and responsibly, giving customers complete peace of mind.

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Financial Incentives for the Customer

To encourage vehicle owners to give up their old cars voluntarily, the government offers a basket of benefits, which are unlocked once your facility issues them a Certificate of Deposit (COD) via the VAHAN portal:

• Scrap Value: The RVSF pays the owner a scrap value, which typically ranges between 4% to 6% of the ex-showroom cost of the new vehicle they intend to buy.

• Road Tax Rebate: State governments offer a major concession on road tax for the new vehicle purchase—up to 25% for private passenger cars and up to 15% for commercial transport vehicles.

• Registration Fee Waiver: Upon submitting the COD, the standard government fee required to register a brand-new vehicle is 100% waived.

• Manufacturer (OEM) Discounts: Major automakers are advised to provide an additional discount of up to 5% on the retail price of a new car if a valid scrapping certificate is produced

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Strict Compliance Rules for RVSF Yards

Operating an authorized facility like Omzee Car Scrapper means meeting strict corporate and environmental rules laid down by MoRTH and the Central Pollution Control Board (CPCB):

• Anti-Corruption Controls: Yards must verify every vehicle against the National Crime Records Bureau (NCRB) database dynamically via the VAHAN network before cutting the car. This ensures stolen vehicles or cars with active court liens cannot be legally processed.

• Eco-Friendly Depollution: Traditional scrap yards used to spill chemicals directly into the ground. RVSFs are legally mandated to have specialized drainage systems to safely recover and recycle hazardous fluids (brake oils, engine coolants, fuel, and heavy battery acids).

• Chassis Number Destruction: The physical vehicle identification number (VIN) or chassis stamp must be cut out out of the vehicle and physically stored securely for at least 6 months to allow for government auditing before final destruction.

• Part Trading Restrictions: To maintain road safety, the policy explicitly prohibits RVSFs from reselling critical second-hand structural assemblies, including the original core engine block, the primary power transmission box, steering mechanics, critical axles, and the main frame chassis.

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The Macro Objective

Ultimately, the government is driving this policy to achieve three primary national targets:

1. Reduce Emissions: Older vehicles built under older emission norms emit vastly higher rates of particulate matter and greenhouse gases compared to modern vehicles.

2. Circular Economy: By shredding steel, aluminum, copper, and plastics systematically, domestic automakers can reuse high-quality recycled scrap metals, drastically reducing India's reliance on raw metal imports.

3. Boost Auto Sales: Removing millions of obsolete vehicles naturally creates a sustainable, long-term surge in demand for the domestic manufacturing of cleaner passenger cars and electric vehicles (EVs).