The Government of India has proposed of doubling the rebates of upto 50 percent in onetime tax on purchase of new vehicles in lieu of scrapping the ones with BS2 or earlier emission norms.  This development was confirmed via an official draft notification issued on January 24, 2025.

• The capping on rebate currently stands at 25 percent for private vehicles
• For commercial vehicles, it stands at 15 percent.
• Vehicles qualifying for additional rebates will be atleast 25 years old.

The official draft notification released by the Ministry of Road Transport and Highways (MoRTH) said up to 50 per cent discount would be applicable for all vehicles, both commercial and personal, that are BS-I compliant or were manufactured before the BS norms were introduced. The notification further says that this discount would be applicable in case BS-II vehicles that fall under medium and heavy private and transport vehicles.

Currently, owners who send their old privately registered vehicles for scrapping get 25 percent discount in the motor vehicle tax of the new vehicle purchased. For commercial vehicle, the rebate is capped at 15 percent.

Government of India had introduced the BS1 carbon emission norms back in 2000 while the BS2 emission norms came into effect in 2002.  This means vehicles that qualify for the additional rebate are atleast 25 years old.

Owners of these old vehicles who wish to get them scrapped via the Government of India’s Transport Ministry’s Voluntary Vehicle Modernization Program or Vehicle Scrapping Policy. The scrapping of these vehicles can be carried out through a network of Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs).

Currently, there are 60-plus Registered Vehicle Scrapping facilities in India across 17 states/UTs and as many as 75 Automated vehicle testing stations present across 12 states/Union Territories. The government has plans to introduce more such facilities across the country in due course.