Govt plans more tax concessions on vehicles purchased after scrapping old ones | Those who give old vehicle in scrap will benefit, considering giving more incentive to buy new vehicle

Photo: PTI

Govt plans more tax concessions on vehicles purchased after scrapping old ones

Highlights

  • States and Union Territories will give up to 25 percent rebate on toll tax on buying a new vehicle after converting old vehicles into junk.
  • The GST Council has also been urged to explore the possibility of what more incentives can be given under the new policy.
  • Scrap policy will benefit all stakeholders as it will boost manufacturing, create jobs and increase revenue

New Delhi. Union Minister Nitin Gadkari said on Tuesday that the government is considering a proposal to give more tax-related concessions on new vehicles purchased after converting old vehicles into scrap under the recently introduced National Vehicle Scrap Policy. Gadkari also said that the new scrap policy will reduce pollution. He said this while inaugurating the Scrap and Recycling Facility Center of Maruti Suzuki Toyotsu. This is the first such center to be approved by the government.

The Road Transport and Highways Minister said that the scrap policy will increase the Goods and Services Tax (GST) revenue of both the Center and the states. I will discuss with the Finance Ministry how more tax related concessions can be given under the new policy. Under the new policy, the Center had said that the states and union territories will give up to 25 percent rebate on toll tax on buying a new vehicle after converting old vehicles into scrap. Gadkari said that he is also urging the GST Council to explore the possibility of what more incentives can be given under the new policy.

He said that the final decision in this regard will be taken by the Finance Ministry and the GST Council. The minister said the scrap policy would benefit all stakeholders as it would boost manufacturing, create jobs and generate revenue of up to Rs 33,000-40,000 crore for both the Center and the states under GST. He said that the scrap policy is important from the point of view of curbing pollution and generating employment.

Gadkari said that old vehicles cause more pollution than new vehicles. Hence they need to be removed. We expect the scrap policy to increase sales by 10 to 12 per cent. He said that the junk policy is also important for the economy. We will be able to get raw material at low cost. This can reduce the cost of production. Gadkari also said that the Center is planning to set up at least 3-4 vehicle recycling or junk centers in every district of the country.

He said that in the next two-three years, there will be 200-300 junk centers. Gadkari also said that the annual turnover of the auto sector is Rs 7.5 lakh crore and he aims to increase it to Rs 15 lakh crore in five years. The minister said that India has set a target of net zero carbon emissions by 2070. I am sure the junk policy will help in this. Speaking on the occasion, Kenichi Ayukawa, Managing Director and CEO, Maruti Suzuki India Limited said that like many countries, we need a policy where vehicle fitness is checked every 3-4 years. We don’t have to wait 15 years.

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