Motor Vehicles (Registration & Functions of Vehicle Scrapping Facility) Policy 2022


In the current global scenario, environmental pollution is the most alarming issue causing climate change, threatening the lives of important species. The rising number of vehicles, especially old vehicles, plying on the roads, is a major contributor to Air pollution levels. Unlike developed countries, the current setup for vehicle recycling in India is extremely unorganized and the majority of the vehicles are being scrapped through the informal sector which does not follow any Legal/ Environmental, or Ethical norms. The non-scientific manner of recycling causes low material recovery, environmental damage by way of water/air/soil pollution, and unsafe working conditions for workers. The current unorganized system also lacks visibility and transparency in the process for owners and the government.

On this backdrop, the Ministry of Road Transport and Highways (MoRTH) has notified the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021 vide Notification No. G.S.R. 653(E), Dated. 23rd September 2021 and Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Amendment Rules, 2022 vide Notification No. G.S.R. 695(E), Dated. 23rd September 2022, which lay down the procedure for the establishment of a "Registered Vehicle Scrapping Facility" (RVSF) for carrying out dismantling and scrapping operations of "End of Life" vehicles, which applies to all vehicles and their last registered owners, Automobile collection centers, Automotive Dismantling, Scrapping and Recycling Facilities and re-cyclers of all types of automotive waste products. The government of India has also requested all State Governments/ UTs to formulate a policy to carry out the provisions of Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021

Vision & Objectives

As per the data available from the Ministry of Road Transport and Highways up to 2021, more than 18 lakh vehicles are to be scrapped in Odisha. The Vehicle Scrappage Policy of Odisha,2022 is formulated with the following objectives:

  • Reduce air pollution by scrapping old and unfit vehicles
  • Improve road safety, road users, and vehicular safety
  • Improve fuel efficiency and reduce maintenance costs of vehicle owners
  • Regularize the current informal and un-organized vehicle recycling industry/facility in Odisha,
  • Scientifically promoting recycling of vehicle scrap
  • Promoting circular economy in an eco-friendly manner
  • Encourage setting up of Registered Vehicle Scrapping Facility
  • Public
Incentive Name Incentive Particulars
Motor Vehicle tax Concession In case a new vehicle is registered against submission of a "Certificate of Deposit", the concession in the motor vehicle tax shall be 25% in the case of non-transport vehicles and 15% in case of transport vehicles in the State of Odisha. This concession shall be available up to 8 years in the case of transport vehicles and up to 15 years in the case of non-transport vehicles. Further, the fee for the issue of a Certificate of Registration shall not be levied for such vehicles purchased against submission of a "Certificate of Deposit"
Payment of Scrap value Scrap value for the old vehicles shall be given by the Scrapping Center at approximately 6% of the ex-showroom price prevailing at the time of scrapping. In case the vehicle has been declared obsolete/is not being produced any more, the scrapped value will be decided by negotiation between the vehicle owner and the scrapping center
Discount on New Vehicle Automobile Manufacturers will be advised to provide a discount preferably 5% on the purchase of new vehicle against the Certificate of Deposit
  • Investors
Incentive Name Incentive Particulars
Land at Concessional Rates Government land earmarked for Industry under the Land Bank Scheme of IDCO and other Government land wherever available will be allotted for the RVSFs. Concessional rates of land will be applicable, as specified in Odisha's Industrial Policy Resolution
Stamp Duty No stamp duty will be required to be paid in respect to the land allotted by the Government, IDCO and private industrial parks/estate developer to the RVSFs
Exemption from Payment for conversion of land for industrial purpose The RVSFs will be exempted from payment of premium for conversion of land for industrial purpose
Capital Investment Subsidy 10% Capital Investment Subsidy will be provided on actual investment in Plant and Machinery installed or made operational till the date of commissioning of RVSF up to a maximum overall limit of Rs. 1 crore.
SGST Reimbursement The Industrial Unit shall be eligible for reimbursement of 25% of the net SGST paid for a period of 7 years from the date of commencement of commercial operations, provided that the SGST reimbursement shall be applicable only to the net tax paid towards the state component of GST, after the adjustment of the input tax credit against the output tax liability.
Electricity Duty The RVSF shall be exempted from payment of electricity duty for a period of 5 years tom the date of availing power supply by DISCOM for commercial operations.