Gujarat’s Ports and Transport Department has notified a concession of up to 50% on motor vehicle tax for buyers who scrap an eligible old vehicle and register a new one. The offer, announced on October 1 and reported by DeshGujarat, runs against a deadline: the scrapping certificate must be issued on or before March 31, 2027.
Which vehicles qualify
The notification draws the line by emission standard, not age. Two groups qualify:
- Transport and non-transport vehicles built to Bharat Stage-I or older norms. That covers private cars, two-wheelers, taxis and goods carriers from roughly the turn of the century and earlier.
- Medium and heavy goods vehicles, and medium and heavy passenger vehicles, built to BS-II norms. In practice this means trucks and buses from the mid-2000s.
BS-I norms arrived around 2000 and BS-II around 2005, Gujarat Samachar noted. A BS-II truck still on the road today has done close to two decades of hauling, and fleet owners running such trucks stand to gain the most.
How the claim works
The owner first takes the old vehicle to an authorised scrapping facility. Once the facility dismantles it, it issues a Certificate of Deposit (COD). The owner then presents that COD at the RTO when registering the new vehicle, and the concession comes off the tax due at that point. The state has kept its existing method of calculating motor vehicle tax; the concession applies on top of it. One COD can be used only once, so a single scrapped truck cannot discount two new ones.
The reports describe the benefit as “up to” 50%, and none of them sets out a slab-by-slab breakdown by vehicle class. Buyers should ask their RTO or dealer what rate applies to their specific purchase before they scrap anything.
Why the state is doing this now
India’s national vehicle scrappage policy was launched in August 2021 at an investor summit in Gandhinagar, and the central rules that followed let states offer road-tax relief against a COD. Those 2021 central rules allowed concessions of up to 25% for private vehicles and 15% for commercial ones. Gujarat’s ceiling of 50% doubles the private figure, and the March 2027 cut-off suggests the state wants a burst of scrapping rather than a slow trickle.
The pool of old vehicles is large. Gujarat has more than 2 crore registered vehicles, and a 2022 government statement put the number aged 15 years or more at 41.20 lakh, according to Gujarat Samachar. No separate official count of BS-I and BS-II vehicles is public, so the share of that 41.20 lakh actually eligible for this scheme is unknown.
What it means for owners
For a family holding on to a 1990s scooter or car, the arithmetic depends on the new vehicle’s price, since motor vehicle tax in Gujarat is charged as a percentage of it. The pricier the new purchase, the bigger the rupee saving. Owners should also weigh the scrap value the facility pays for the old vehicle, which comes on top of the tax relief.
For transporters, the numbers scale with fleet size. A fleet operator replacing several BS-II trucks could cut a meaningful slice off registration costs, provided the old trucks go through an authorised facility and each gets its own COD.
Cities gain too. Each BS-I car or BS-II truck that goes to a scrapyard and gets replaced by a BS-VI model takes one of the dirtiest engine generations off Gujarat’s roads.
What to watch
The scheme’s success will hinge on scrapping capacity. If authorised facilities in Saurashtra, Kutch and north Gujarat are few, owners there face long tows to get a COD. Watch for whether the transport department publishes uptake figures before the March 2027 deadline, and whether it extends the window if numbers fall short.
Sources: DeshGujarat, Gujarat Samachar, IANS via The Hans India
This report was compiled and written with AI assistance from publicly reported sources, and reviewed for accuracy.