Vehicle Scrappage Policy in India: Certificate of Deposit (CD), Road Tax Rebate & Rules
Planning to scrap an old 15-year vehicle in India? Learn how Registered Vehicle Scrapping Facilities (RVSF) issue Certificates of Deposit, road tax discounts, and registration fee waivers.
Under India's National Vehicle Scrappage Policy, scrapping your 15+ year old vehicle at a government-authorized Registered Vehicle Scrapping Facility (RVSF) earns you an official Certificate of Deposit (CD). This tradeable certificate grants up to a 25% road tax concession on a new vehicle purchase and waives new registration fees.
Certificate of Deposit (CD) / Scrappage Certificate
Parivahan-verified digital certificate issued by Registered Vehicle Scrapping Facilities (RVSF)
Understanding the National Vehicle Scrappage Policy
To phase out polluting, unfit, and fuel-inefficient end-of-life vehicles across India, the Ministry of Road Transport and Highways (MoRTH) introduced the Voluntary Vehicle-Fleet Modernization Program, commonly known as the National Vehicle Scrappage Policy. Under this statutory framework, private personal vehicles older than 20 years and commercial vehicles older than 15 years must undergo automated fitness testing. If an aged vehicle fails fitness or the owner voluntarily elects to retire it, the vehicle can be handed over exclusively to a government-authorized Registered Vehicle Scrapping Facility (RVSF).
Financial and Statutory Benefits of the Certificate of Deposit
Scrapping your vehicle legally at an RVSF unlocks tangible financial incentives across four distinct channels:
1. Road Tax Concession up to 25%: Presenting your Certificate of Deposit at the time of registering a brand-new vehicle entitles you to a motor vehicle road tax rebate of up to 25% for personal vehicles and 15% for commercial vehicles across participating states.
2. Complete Waiver of Registration Fees: The Central Motor Vehicles Rules grant an exemption on registration fees for new personal cars when backed by a valid CD, saving ₹600 to ₹1,500 at the RTO counter.
3. Fair Market Scrap Value Payout: The authorized RVSF weighs your vehicle on industrial scales and transfers scrap metal and salvage value directly into your bank account, typically yielding 4% to 6% of the ex-showroom price of a comparable new car.
4. Auto Manufacturer Discounts: Major carmakers have pledged an additional 5% discount on the ex-showroom price of new vehicles for buyers who surrender a Certificate of Deposit at the dealership.
The 4-Step Legal Scrapping Procedure at an Authorized RVSF
Never hand your old vehicle over to unorganized roadside kabadiwalas, as unregistered chassis cuts are frequently used in criminal operations or illegal clones. Follow this safe statutory process:
1. Locate an Authorized RVSF on Parivahan: Visit the official MoRTH National Single Window System or Parivahan portal to book an appointment with an authorized scrapping center near you.
2. Document & Ownership Verification: Submit your original RC, Aadhaar card, PAN card, and a bank canceled cheque. The RVSF conducts automated database checks to ensure zero pending NCRB police stolen cases, court attachments, or unpaid e-challans.
3. Handover and Digital Certificate of Deposit Generation: Hand over the vehicle with its keys. The RVSF cuts the chassis number plate in front of high-definition cameras, logs the destruction on the Parivahan server, and issues your digitized Certificate of Deposit (CD) alongside a Certificate of Vehicle Scrapping (CVS).
4. Automatic RC Cancellation at RTO: The RTO database automatically deregisters the vehicle without requiring you to stand in physical queues, completely indemnifying you from future liability. Upload your final documents into DownShift.
Frequently Asked Questions
Can I sell or transfer my Certificate of Deposit to someone else?
Yes! Under the Ministry of Road Transport and Highways (MoRTH) guidelines, the digital Certificate of Deposit (CD) is fully tradeable. If you scrap an old car but do not wish to buy a new vehicle yourself, you can legally sell or transfer the CD to another car buyer who can redeem the road tax concession on their new purchase.
How much road tax discount do I receive on a new car with a scrappage certificate?
State transport departments offer up to a 25% road tax concession on the registration of new non-transport (personal) vehicles and up to a 15% concession on transport (commercial) vehicles when you submit a valid Certificate of Deposit.
How does DownShift manage 15-year vehicle lifecycles?
DownShift monitors your vehicle's manufacturing date, RC fitness expiration, and regional green tax regulations, alerting you well in advance whether to renew fitness or take advantage of authorized scrappage incentives.
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