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The Ministry of for Road Transport and Highways (MoRTH) has finally approved the vehicle scrappage policy that will come into effect from 1st April, 2022. The policy, however, will be applicable only to government vehicles including both Central and State governments.

The vehicles used by government departments and PSUs (Public Sector Undertakings) will be de-registered and scrapped out if they are older than 15 years. This decision has been taken to reduce air pollution, while encouraging demand in the automobile industry. The vehicle scrappage policy for personal, transport and commercial vehicles is yet to be announced.

Nitin Gadkari, the Union Minister for Road Transport and Highways, has also approved a proposal to levy a ‘Green Tax’ for older vehicles. The proposal has been sent to all states for consultation, before it’s finally notified. The government has a plan to use the green tax revenue for tackling pollution. Under the new norm, the commercial vehicles which are older than 8 years will be charged green tax at the time of fitness certificate renewal.

The tax amount will be between 10 to 25% of the road tax. The vehicles which are registered in highly polluted cities will be charged a higher green tax of 50%. The MoRTH also stated that a differential tax will also be imposed that will vary with fuel and type of the vehicle. The green tax will be charged from personal vehicles at the time of renewal of registration certificate after 15 years. The public transport vehicles will have a lower green tax than the personal vehicles.