Discount On New Car After Scrapping Old One Cannot Be Made Mandatory: Nitin Gadkari

While the final scrappage policy is still awaited, for those expecting a big discount on their new car after scrapping the old one, here’s some news. At the 62nd SIAM annual convention, the Union Minister of Transport, Nitin Gadkari, today said that the discount cannot be made mandatory. He urged the manufacturers to offer discounts to customers. He said, “Car manufacturers need to offer discounts to buyers who have a scrappage certificates. For big trucks it can be Rs. 50,000 or Rs. 1,00,000 and for small vehicles it could be less, then that can be incentive. We cannot make the discounts mandatory.” The statement differs from what was said in March 2021, where Gadkari had that owners who scrap their old vehicles will receive a rebate of about five per cent from the manufacturer while purchasing a new vehicle under the scrappage policy. 

Under the scrappage policy, old vehicles will have to pass a fitness test before re-registration and, as per the policy, government commercial vehicles more than 15 years old and private vehicles which are over 20 years old will be scrapped. Beginning April 1, 2023, fitness testing of Heavy Commercial Vehicles (HCVs) shall be conducted only through Automated Testing Stations (ATSs). For other types of Commercial Vehicles and Private Vehicles (PVs), the fitness testing shall also be conducted through the ATS and begin on June 1, 2024.

So, while the discounts are at the discretion of the auto manufacturers, will there atleast be a reduction in GST that the consumers will get if they opt for a new car? Well, Gadkari said that “Just yesterday I had a meeting with Mr. Scindia (the Union Minister of Steel) and we are both going to request the Finance Minister for some GST concession for that”