Agreements have been finalised to set up three centres in Kerala for scrapping end-of-life vehicles. Two of them will come up under Steel Industries Kerala Limited at Kannur and Cherthala, while the Kerala State Road Transport Corporation (KSRTC) will establish its own scrapping centre on its premises at Edappal in Malappuram district. Vehicle scrapping is expected to begin at these centres within six months.
In line with the national policy to phase out vehicles older than 15 years, authorised scrapping centres are being set up in the states. Vehicles can only be scrapped once a vehicle inspector has examined, certified, and cancelled the registration.
With the arrival of authorised scrapping centres, owners will be able to hand over their vehicles along with the necessary documents. They will immediately receive a Certificate of Deposit (proof that the vehicle has been scrapped). On presenting this certificate while purchasing a new vehicle, they will be eligible for a tax concession of 10 to 15 per cent and a discount of up to 50 per cent.
Union Minister for Road Transport and Highways Nitin Gadkari recently called for more attractive concessions on new vehicles for those scrapping old ones. He has also urged the Prime Minister and the Finance Minister to allow additional GST concessions for such users.
According to him, this would benefit both companies and consumers alike. At present, 16,830 vehicles are scrapped every month. Gadkari added that the private sector has already invested ₹2,700 crore in this field.
The state government will receive 3.26 per cent of the value of vehicles brought to these centres for scrapping. In addition, under the vehicle scrapping policy, the Centre has allocated ₹150 crore to the state.
When tenders were invited for these centres, ₹83 crore had already been sanctioned. Moreover, the government will receive ₹5,000 from the Centre for each vehicle scrapped, and after the first 50,000 vehicles, this amount will be increased to ₹6,000 per vehicle.