Scrap your old car at a registered facility and you could shave up to 25 percent off the road tax on your next one, while a piece of digital paper called the Certificate of Deposit unlocks the rest of the savings.
Quick answer: When you scrap an old vehicle at a Registered Vehicle Scrapping Facility, you get a Certificate of Deposit. Showing this CoD while buying a new vehicle gets you a road tax rebate of up to 25 percent for personal vehicles or up to 15 percent for commercial vehicles, plus a registration fee waiver and a manufacturer discount.
The Vehicle Scrappage Policy is run by the Ministry of Road Transport and Highways. The benefits below are claimed against one Certificate of Deposit when you register a new vehicle. The road tax rebate is offered by State Governments, so the exact percentage and the period for which it runs vary by state.
| Incentive | Personal vehicle | Commercial vehicle | Who gives it |
|---|---|---|---|
| Road tax rebate | Up to 25 percent | Up to 15 percent | State Government |
| Registration fee waiver | Yes | Yes | State Government |
| New vehicle discount | About 5 percent | About 5 percent | Vehicle manufacturer |
| Scrap value payment | Yes | Yes | Scrapping facility |
The Certificate of Deposit, or CoD, is the official proof that your vehicle was scrapped at an authorised facility. It is issued digitally by the RVSF and carries a unique reference. The CoD does three things. It allows the old vehicle to be deregistered, it lets you claim the incentives on a new vehicle, and it is tradable, which means you can transfer or sell it to another buyer who can then use it against their own new purchase. Because it is transferable, the CoD has value even if you do not plan to buy a vehicle yourself straight away.
The age and fitness framework is the reason many owners choose to scrap rather than keep an old vehicle. Enforcement and exact rules vary by state and by vehicle category, but the broad position is as follows.
These rules sit under the Central Motor Vehicles Rules, 1989 as amended, and the 2021 RVSF Rules. Higher re-registration and fitness fees on older vehicles are designed to make scrapping the cheaper and cleaner option, with an environmental and road safety benefit on top.
Illustrative example. Suppose Kashvi Pathak owns a 21 year old car that keeps failing its fitness test. She applies on the scrapping portal, takes the car to an RVSF, and receives a scrap value payment plus a Certificate of Deposit. When she buys a new car priced at ₹8,00,000, she presents the CoD. Her State Government allows a road tax rebate of up to 25 percent, the registration fee is waived, and the manufacturer gives about 5 percent off. Together these cut a meaningful slice off her on road cost. The exact rebate depends on her state notification.
It is administered by the Ministry of Road Transport and Highways. Vehicles are scrapped at Registered Vehicle Scrapping Facilities authorised under the Motor Vehicles RVSF Rules, 2021, and applications are made through vscrap.parivahan.gov.in.
State Governments offer a rebate of up to 25 percent for non transport, or personal, vehicles and up to 15 percent for transport, or commercial, vehicles. The exact percentage and the period for which it applies vary by state.
Yes. The CoD is tradable, so you can use it yourself when buying a new vehicle or transfer it to another buyer who can then claim the incentives on their own new vehicle.
No. Scrapping gets you the CoD and the scrap value payment regardless. The road tax rebate, registration fee waiver and manufacturer discount apply only when the CoD is used against a new vehicle, whether by you or by someone you transfer it to.
Government vehicles older than 15 years are to be deregistered. Private vehicles need a fitness test after 20 years and commercial vehicles after 15 years. A vehicle that fails fitness is treated as end of life. Exact enforcement varies by state.
A Registered Vehicle Scrapping Facility is a government authorised centre where end of life vehicles are dismantled and recycled to environmental standards. Only an RVSF can issue a valid Certificate of Deposit.
Yes. The RVSF pays you the scrap value of the vehicle for its recyclable material. This is separate from the incentives you claim on a new vehicle using the CoD.
If a transport office or scrapping facility delays your Certificate of Deposit, your deregistration, or your road tax rebate, you can file a Right to Information request to ask for the status, the file notings and the reason for delay. You can prepare a clean application with the AI RTI Drafter, and read your rights under the RTI Act 2005. For a step by step guide to filing and appeals, see The RTI Playbook.