Looking at more scrappage concessions: Nitin Gadkari

The government is considering providing more tax-related concessions for vehicles that are purchased after scrapping old vehicles under the National Automobile Scrappage Policy, Union Transport Minister Nitin Gadkari said on Tuesday.

He noted that the scrappage policy would reduce pollution, boost automobile sales and contribute to employment generation. Gadkari was speaking at the launch of Maruti Suzuki Toyotsu India’s (MSTI) first government approved ELV (end-of-life-vehicle) scrapping and recycling unit in Noida, Uttar Pradesh. MSTI is a joint venture between Maruti Suzuki and Toyota Tsusho Group.

When asked if the government was considering offering more incentives to consumers for scrapping their old vehicles, Gadkari said, “We are about to sit with the Finance Ministry to facilitate scrapping, to look at whether we can give more concessions.”

He added that a rise in GST collections due to higher automobile sales would lead to both the Centre and states benefiting from an increase in GST mopup of Rs 30-40,000 crore. Gadkari said the scrappage policy would contribute to solving the issue of air pollution as old vehicles pollute much more than newer vehicles.

The Transport Ministry announced the scrappage policy in March, aiming to incentivising scrapping vehicles older than 15 years to reduce pollution and encourage purchase of new vehicles.

Gadkari said that besides lowering pollution, scrapping of older vehicles would also help lower raw materials cost for automobile manufacturers through the recycling of materials from vehicles being scrapped.