Vehicle Scrappage Policy
💡 Vehicle Scrappage Policy: Key Highlights
- The certificate is tradeable — the OEM schedule pays less against a traded one.
- Four components set its value: scrap value, registration-fee waiver, tax concession, OEM discount.
- In NCR the trigger moved from age to emission standard on 17 December 2025.
- Scrappage and EV incentives do not double up — EVs already skip registration fees.
- Start the depot power sanction before the scrapping date.
If you run ageing diesel trucks, buses or light commercial vehicles — especially in NCR or another age-restricted city — India’s vehicle scrappage policy has probably reached you as a deadline. That framing costs fleets money.
The certificate an authorised facility issues against your old truck is closer to a financial instrument than to paperwork. The proof is in the government’s own numbers: manufacturer discounts pay one rate for a vehicle you scrapped yourself, and a lower rate for a certificate that changed hands.
Where India’s Vehicle Scrappage Policy Actually Bites
No national rule kills a commercial vehicle at fifteen. Which rule reaches you depends on where it runs.
Restricted cities: an explicit end-of-life rule
In Delhi-NCR an end-of-life vehicle has long meant a diesel over ten years old or a petrol over fifteen. CAQM’s Direction No. 89 gave that teeth by denying such vehicles fuel at the pump through number-plate recognition. Enforcement was re-phased after Delhi flagged camera-network gaps: Delhi plus five high vehicle density districts — Gurugram, Faridabad, Ghaziabad, Gautam Budh Nagar and Sonipat — from 1 November 2025, the rest of NCR from 1 April 2026.
Then the trigger moved from age to emission standard
On 17 December 2025 the Supreme Court modified its own August 2025 order, which had barred coercive action against over-age vehicles in NCR. Protection now covers only vehicles meeting BS-IV norms or newer. Two eleven-year-old trucks in one depot can therefore sit on opposite sides of the line on emission standard alone, so your register needs both fields: registration date and BS norm.
The Quieter Clock: Fitness And Permit Renewal Economics
Outside the restricted cities, nothing happens on a vehicle’s birthday. The pressure arrives through renewal instead — and most operators meet it first in the workshop ledger.
An instrumented test changes the maths
A transport vehicle cannot legally operate without a valid certificate of fitness, and renewal tightens with age. What changed is how it is tested: MoRTH phased in mandatory testing through Automated Testing Stations from 1 April 2023 for heavy vehicles, with the mandatory date later notified as 1 October 2024. A manual inspection has discretion in it; a rolling-road brake test does not. On a twelve-year-old truck that turns an inconvenience into an annuity — the cost of getting it fit enough to pass, every cycle.
Find the crossover year, then work backwards
Model two curves per vehicle: the annual cost of keeping it legal and moving (fitness testing, repairs-to-pass, permit renewal, maintenance), against scrap value, which only ever declines. They cross, and that year is your replacement trigger — not the morning a driver calls in from the roadside. Most fleets find the crossover a year late, from repair invoices. Holding registration dates, BS norms and fitness expiry against each asset is what vehicle management software is for.
What A Scrappage Certificate Actually Converts Into
Under the vehicle scrappage policy you deposit the old vehicle at a Registered Vehicle Scrapping Facility, created by the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021, and receive a Certificate of Deposit. It converts into four things that behave differently.
| Component | What decides its value |
|---|---|
| Scrap value | Weight and condition. Market-set — MoRTH does not price private vehicles, so quote more than one. |
| Registration fee waiver | No registration-certificate fee on the replacement vehicle. |
| Motor vehicle tax concession | Up to 25% non-transport, up to 15% transport, for up to eight years. A state levy, so its value follows your state’s schedule — a stream, not a lump sum. |
| OEM discount | The vehicle bought, and whether the certificate is yours or traded. |
The proof that the certificate is tradeable
Under the Voluntary Vehicle Modernization Programme, the schedule for commercial cargo vehicles read: 3% of ex-showroom price where the buyer had scrapped the vehicle themselves within six months, and 2.75% against a traded Certificate of Deposit — 1.5% and 1.25% below 3.5 tonnes GVW. That quarter-point gap is the price of the certificate having changed hands. So if you scrap more vehicles than you replace this year, the surplus certificates are inventory, not waste. Those commitments ran for a limited window — confirm current terms with the OEM. If the vehicle you retire is itself electric, see our guide to EV battery recycling and EPR.
Does The Scrappage Benefit Stack With EV Incentives?
The honest answer is unsatisfying: partly, because the two schemes reach for the same line items.
The registration fee is already gone
Battery-operated vehicles were exempted from the registration-certificate fee in August 2021, before the scrappage concessions took effect. If your replacement is electric, that component is worth nothing — you cannot waive a fee you were never going to pay. On a diesel-for-diesel replacement it is worth full face value.
The tax concession may meet the same fate
Several state EV policies already exempt electric vehicles from motor vehicle tax outright, and “up to 15%” of an exempt vehicle is zero. This is the one component whose answer varies by state — and the one case where a diesel replacement can be worth more in tax terms than an electric one. What survives either way is the scrap value and the OEM discount, which is tied to the certificate, not the fuel — so the electric case rests on vehicle economics plus the central demand incentive. The wider picture sits in our EV fleet policy and incentive overview.
Track the sub-component, not the headline date
PM E-DRIVE now runs to 31 March 2028 within the same ₹10,900 crore outlay, extended explicitly for e-trucks and e-buses, while the e-2W, e-rickshaw and e-3W windows closed on 31 March 2026. It is also fund-limited: a sub-component shuts when its funds run out, whatever the date, so an early claim is worth more than a late one. Delhi-NCR operators have a further layer in PARIVARTAN — see its guidelines and incentives and truck and bus discounts.
Building The Replacement Calendar Backwards From The Depot
Here is the trap that turns a good scrappage decision into a bad quarter. Depot power is a process — sanctioned-load application, DISCOM sanction, cabling, installation, commissioning — that runs for months with a utility inside it. Scrap in month zero and start the depot work in month zero, and you have retired capacity you cannot replace.
The scrapping date is the last date in the sequence, not the first. Fix the month the replacement must be earning, subtract commissioning and installation, subtract the sanction time your DISCOM actually takes rather than its published one, then set the deposit date. Our EV depot design strategy covers sizing the power ask; smart charging covers not over-sizing it.
A replacement calendar you can actually fill in
| Column | Why it is there |
|---|---|
| Date of first registration | The clock every rule counts from |
| BS emission norm | Decides NCR exposure, not age |
| Next fitness & permit renewal | Drives the crossover year |
| Estimated scrap value | Quote two facilities; it only falls |
| Depot readiness start | Earning month minus commissioning and sanction |
| Target deposit month | Set last, after the depot date is locked |
| Replacement type | Decides which components pay |
Sort by restricted-city exposure, then BS norm, then the renewal-cost crossover — that ordering settles most of the argument a planning meeting consumes. Keeping these fields beside utilisation and charging data in a fleet operating system like YoMobility keeps the calendar current as vehicles move between depots; fleet electrification from pilot to scale covers sequencing at volume.
Vehicle scrappage policy rules here were verified against MoRTH, CAQM and PM E-DRIVE sources on 15 September 2026. Age limits, NCR restrictions and OEM discount windows have each been revised more than once — confirm your current position with CAQM and your state transport department.
Frequently Asked Questions
Sources: MoRTH — GSR 720(E) | MoRTH — Scrappage Policy 2021 | MoRTH — Modernization Programme | MoRTH — Testing Stations | MoRTH — GSR 525(E) | CAQM — EoL vehicle timeline | MHI — PM E-DRIVE extension | MoRTH — V-Scrap portal | Business Standard — SC order
Manage Your Fleet’s Replacement Calendar Today
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