Maharashtra Cabinet Announces 15% Tax Concession for Voluntary Vehicle Scrapping

In an effort to promote environmental sustainability and reduce vehicle pollution, the Maharashtra Cabinet has approved a significant tax concession for vehicle owners who voluntarily scrap their old vehicles when purchasing new ones of the same type.​

The decision was made in a meeting chaired by Maharashtra Chief Minister, Devendra Fadnavis, on April 1. According to a statement released by the Chief Minister’s Office (CMO), this initiative will provide a 15% tax concession to owners who opt for vehicle scrapping.

Key Details of the Tax Concession Scheme​

Under the new policy, the tax concession will be provided as follows:

• For Transport Vehicles: Owners of transport vehicles that are voluntarily scrapped within eight years of registration at a Registered Vehicle Scrappage Facility (RVSF) will be eligible for a 10% tax concession. Furthermore, transport vehicles subject to lump sum taxes will be eligible for a 15% tax concession.
• For Non-Transport Vehicles: Non-transport vehicles, which include private cars and two-wheelers, can also avail a 10% tax concession if they are voluntarily scrapped within 15 years of registration. Similar to transport vehicles, non-transport vehicles will receive a 15% tax concession if they are subject to lump sum taxes.

In addition, the scheme offers annual tax concessions for transport vehicles over the next eight years from the registration date and for non-transport vehicles over the next 15 years.

How the Scheme Works​

Owners who scrap their vehicles at a Registered Vehicle Scrappage Facility (RVSF) will receive a Certificate of Deposit, which will be valid for two years. This certificate is required for claiming the tax concession when registering a new vehicle of the same type, whether it be a two-wheeler, three-wheeler, or light motor vehicle.

The tax concession will be available for vehicles scrapped within three years from the date of publication of the official notification concerning the scheme.

Environmental and Economic Impact​

The initiative is expected to support the government’s broader objectives of reducing pollution levels and promoting eco-friendly transportation options. It will also encourage the automobile industry to stimulate new vehicle sales, benefiting both consumers and manufacturers alike.

This move aligns with Maharashtra's commitment to creating a cleaner environment and modernizing its vehicle fleet, contributing to the overall reduction of emissions and pollution.

For further updates, vehicle owners can refer to the official notifications and guidelines issued by the Maharashtra Government.