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Voluntary vehicle scrappage scheme concept note moots three step incentive proposal

Voluntary vehicle scrappage scheme concept note moots three step incentive proposal
Desirazu Venkat Desirazu Venkat Monday 30 May 2016, 16:41 PM

The Centre on May 26, issued a concept note for the voluntary vehicle scrappage scheme. Officially called the voluntary vehicle fleet modernisation plan (V-VFM), the concept note has been issued to gauge public and official reaction. The concept note contains guidelines for the scrapping of vehicles bought on or before March 31, 2005 and has issued a three-step proposal as to how owners would benefit from participating in the programme. The three proposals are scrap value from old vehicle, discounts from automobile manufacturers and partial duty exemption.

The first, scrap value from old vehicles, would involve owners benefitting from a variety of factors like weight and age of the car. It has proposed a pricing mechanism that would be decided by the recycling centre.

The concept of discounts, by automobile manufacturers, for those scrapping their cars has already been in the public eye since this scheme was announced. As the name suggests, automakers would provide discounts for those participating in the scheme. Given that this is still in its initial stages, it is currently not clear what will come under the purview of the discounts.

Finally, partial duty exemption would entail an exemption of up to 50 per cent depending on the vehicle category and age. The government has suggested that buyers would get benefits in the range of 8 per cent to 12 cent of the car’s cost. It has very specifically said that all replacement cars would have to be BS4 compliant only.


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