A Brief Overview of Vehicle Scrapping License
A vehicle scrapping license is a mandatory legal authorization for entities involved in recycling or dismantling end-of-life vehicles in India. Introduced under the 2021 Vehicle Scrapping Policy by the Ministry of Road Transport and Highways (MoRTH), it ensures strict compliance with environmental norms, safe disposal practices, and regulated processing.
Also known as Vehicle Scrapping Authorization or RVSF Registration, this license enables businesses to operate as an Authorized Vehicle Scrapping Facility (AVSF/RVSF). Without proper vehicle scrapping registration, any activity is considered as unauthorized vehicle scrapping, exposing entities to fines and penalties.
The online vehicle scrapping license process has further streamlined approvals. It allows applicants to secure their vehicle scrapping certificate through a structured digital framework. Overall, the licensing system formalizes the scrappage activities, promotes eco-friendly recycling, and unlocks significant opportunities in India’s growing vehicle scrapping ecosystem.
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Here is a list of a few entities that require a vehicle scrapping license:
- Licensed AVSF Operators: Any entity involved in depollution, dismantling, and material recovery must obtain a vehicle scrapping license to operate as a compliant authorized vehicle scrapping facility under the regulatory framework.
- ELVs Processing Scrap Dealers: Businesses dealing with end-of-life vehicles, including old ones up to 10 years, accident-damaged, or impounded vehicles. It is essential to obtain the vehicle scrapping certificate to reduce the risk of unauthorized vehicle scrapping.
- Certified Vehicle Deregistration Centres: Entities issuing a vehicle scrapping certificate, such as the Certificate of Deposit (CoD). It is required for vehicle de-registration on the VAHAN portal to obtain vehicle scrapping authorization through the online vehicle scrapping license process.
Authorized Vehicle Scrapping Facility (AVSF/RVSF): What it Means?
An Authorized Vehicle Scrapping Facility (AVSF) is referred to as a Registered Vehicle Scrapping Facility (RVSF). It is a government-approved center authorized under the Vehicle Scrappage Policy, 2021. Also, it handles end-of-life vehicles (ELVs) in an eco-friendly and in compliance with regulations. The facility operates under a valid vehicle scrapping license or vehicle scrapping authorization, ensuring that all dismantling and recycling activities meet environmental and safety standards.
Proper RVSF registration ensures these centers are legally authorized to verify ownership, carry out depollution, recover recyclable materials, and manage hazardous waste responsibly. They issue a vehicle scrapping certificate, such as Certificate of Deposit (CoD), which is essential for vehicle de-registration and availing benefits on new vehicle purchases.
By reducing unauthorized vehicle scrapping, authorized facilities involved in scrapping vehicles ensure transparency, to support India’s shift toward a circular and sustainable automotive ecosystem.
What are the Benefits of a Registered Vehicle Scrapping Facility?
Choosing a registered vehicle scrapping facility (RSVF) with a valid vehicle scrapping license delivers clear regulatory, financial, and operational advantages that are provided below. These benefits eliminate the risks associated with informal practices.
- Regulatory Compliance Assurance: It ensures proper vehicle scrapping authorization with complete de-registration and minimizing future legal and compliance risks.
- Legally Verified Ownership Closure: The issuance of a vehicle scrapping certificate secures ownership closure and prevents misuse or liability exposure.
- Cost Savings and Incentives Access: It enables registration fee waivers, OEM discounts, and more through compliant vehicle scrapping registration.
- Eco-Compliant Disposal Practices: Authorized processes ensure the safe handling of hazardous materials, reducing environmental damage and pollution risks.
- Efficient Resource Recovery: Structured recycling supports material recovery and strengthens circular economy outcomes.
- End-to-End Process Transparency: Digital records under the RVSF registration ensure traceability, audit readiness, and compliance reporting.
- Enhanced Business Credibility: Operating as an authorized vehicle scrapping facility builds trust and supports scalable and compliant operations.
- Improved Road Safety Outcomes: It removes unfit vehicles from circulation while eliminating the risk of unauthorized vehicle scrapping.
What is the Vehicle Scrappage Policy in India?
The Vehicle Scrappage Policy in India, introduced in 2021, is a government-led initiative to remove old, unfit, and polluting vehicles from roads through a regulated system. It ensures the vehicles are scrapped only at an authorized vehicle scrapping facility operating under a valid vehicle scrapping license, promoting safe, and compliant dismantling practices.
Under this policy, commercial vehicles are tested after 15 years and private vehicles after 20 years. If declared unfit, they must be scrapped through proper vehicle scrapping authorization. The process includes vehicle scrapping registration, issuance of a vehicle scrapping certificate, and complete de-registration from official transport records.
The policy also provides incentives like tax benefits, registration fee waivers, and new vehicle discounts to encourage compliance. It aims to reduce pollution, improve road safety, and eliminate the risks of unauthorized vehicle scrapping, while strengthening the ecosystem through RVSF registration and streamlined online vehicle scrapping approval.
Curious to Know the Vehicle Scrapping Policy Timeframe?
The vehicle scrapping policy in India has been introduced in phases to ensure seamless compliance, testing, and scrapping through authorized scrapping facilities for vehicles and licensed operators. View the key timeframe given below:
- 1 October 2021: The government released rules to set up vehicle fitness testing centres and scrappage units.
- 1 April 2022: All government and PSU vehicles older than 15 years were required to be scrapped through approved facilities under vehicle scrapping authorization.
- 1 April 2023: Heavy commercial vehicles were required to undergo mandatory vehicle fitness testing at Automated Testing Stations (ATS). Unfit vehicles were directed towards scrapping under the vehicle scrapping license.
- 1 June 2024: The rule expanded to cover all commercial and private vehicles. It makes fitness testing compulsory and increases the flow of vehicles to authorized vehicle scrapping facilities.
- 2025-26: The system scaled further with strong state-level integration. By early 2026, over 129 RVSFs were operational and more than 4.3 lakh vehicles had been scrapped under the RVSF registration scheme.
- 2025-26 (Incentives): The government allocated Rs.2000 crore to support infrastructure and encourage people to scrap old vehicles through authorized channels instead of unauthorized vehicle scrapping.
Legal & Regulatory Framework for RVSF Registration in India
India’s RVSF registration framework works through laws and regulations, outlined below.
- Vehicle Scrappage Policy 2021: It enforces the removal of non-unit and polluting vehicles, promotes voluntary scrapping, and prioritizes automated testing over manual inspection.
- Motor Vehicle (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021: It defines requirements to establish authorized vehicle scrapping facilities, mandates RVSF registration, and ensures eco-compliant dismantling processes.
- Automated Testing Stations (ATS): It requires vehicles to undergo automated fitness testing. Vehicles that fail are classified as unfit and are directed for scrapping under vehicle scrapping authorization.
- End-of-Life Vehicles (Management) Rules, 2024: It implements Extended Producer Responsibility (EPR), making manufacturers responsible for managing end-of-life vehicles within the vehicle scrapping license framework.
The legal and regulatory framework for vehicle scrapping in India ensures environmental safety and regulated operations through licensed facilities and standardized procedures nationwide.
Types of Vehicles Available for Authorized Vehicle Scrapping Facility
India’s scrappage framework is well-structured for usage, ownership and environmental impact. With vehicle categorization, it directly impacts on how the vehicle scrapping license holders, authorize scrapping facilities to operators, and businesses handling vehicle scrapping registration must process end-of-life vehicles. That’s why you must not miss the vehicle categories for authorized vehicle scrapping facility given below:
Commercial Vehicles: It includes trucks, buses, taxis and other transport vehicles used for revenue generation.
- After 15 years, a mandatory fitness test is required
- If the vehicle fails, it must be scrapped through an authorized vehicle scrapping facility
- Non-compliance or sale to informal dealers leads to unauthorized vehicle scrapping, which carries legal penalties
For scrapping, the vehicle must undergo the vehicle scrapping authorization process to obtain a valid certificate of deposit.
Government Vehicles: The segment includes vehicles owned by the central and state government departments.
- All such vehicles are scrapped after 15 years, without exception
- Scrapping must be done only via RVSFs with a valid registration
- It ensures transparency, traceability, and compliance with vehicle scrapping license norms
Private Vehicles: This segment comprises the privately owned vehicles used for personal mobility.
- After 15 years, increased registration charges are mandated
- After 20 years, a fitness test is mandatory
- If declared unfit, the vehicle must be scrapped at an authorized vehicle scrapping facility
Vehicle owners opting for scrapping must complete the online vehicle scrapping license-linked procedure. In this way, vehicle owners will obtain the vehicle scrapping certificate, which is essential for de-registration and incentives.
Vintage Vehicles: The vintage or classic vehicles are treated differently due to their heritage value.
- Typically exempt from strict scrappage timelines
- Evaluated under special provisions rather than standard vehicle scrapping authorization rules
- Still requires regulated handling if scrapped to prevent unauthorized vehicle scrapping
What are the Mandatory Documents for Vehicle Scrapping Registration?
Here is an essential checklist of documents required for vehicle scrapping registration. Keep the following documents up-to-date and compiled for smooth processing and approval of the vehicle scrapping license.
- Registration Certificate
- Insurance Certificate
- Pollution Under Control Certificate (PUC)
- Owner’s ID Proof
- PAN Card
- Aadhar Card (for Address Proof)
- Driving License
- Passport
- NOC for Vehicle Registration (for Different State Vehicle Scrapping)
Additional Documents Required for Vehicle Scrapping Authorization
Additional documents may be required based on vehicle type and ownership, to complete vehicle scrapping authorization without delay and ensure compliance. Find the list of documents given below:
| Document Type | Additional Documents Required |
|---|---|
| Financed Vehicles |
|
| Commercial Vehicles |
|
| Inherited Vehicles |
|
The above listed additional documents help entities to verify ownership, prevent delays, and clear liabilities within the vehicle scrapping system.
Documents Obtained after Vehicle Scrapping
Here is a checklist of documents an applicant obtains after the vehicle scrapping process, check below:
- Certificate of Deposit (CoD)
- Vehicle Scrapping Certificate
- Receipt of Vehicle Handover
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Book a 1:1 Virtual MeetingWhat is the Procedure for Obtaining an Online Vehicle Scrapping License?
The process of obtaining the online vehicle scrapping license ensures that only authorized facilities can recycle or dismantle old or used vehicles in compliance with the vehicle scrappage policy, 2021.
- RTO and Authority Application: The scrapping facilities apply to the RTO for the de-registration of the vehicle.
- Document Verification: Applicants submit verified vehicle ownership documents, RC, ID proofs, and insurance.
- Vehicle Inspection: Authorities physically inspect the vehicle with a 10-year lifecycle to match the details and determine whether it can be recycled or dismantled.
- Vehicle Scrap Dismantle or Recycled: The vehicle is dismantled and recycled in compliance with environmental and safety standards.
- License Approval: On successful compliance, the owner receives a valid vehicle scrapping certificate. It serves as proof of de-registration and enables incentives.
Aware of the Risks & Penalties in Unauthorized Vehicle Scrapping?
Opting for unauthorized vehicle scrapping without a valid scrapping certificate exposes owners and businesses to serious legal, financial, and compliance risks, as follows:
- Ongoing Legal Framework Risk: Without proper vehicle scrapping authorization, the vehicle remains active in VAHAN, leaving the original owner legally liable for any future misuse.
- No Valid De-registration Proof: Absence of a vehicle scrapping certificate from an authorized vehicle scrapping facility prevents official RC cancellation and compliance closure.
- Identity and Document Misuse Exposure: Informal scrappers may misuse RC, PAN, or insurance details, creating risks of fraud, illegal resale, or criminal links.
- Loss of Financial Benefits: Without proper vehicle scrapping registration, owners lose OEM discounts, tax rebates, and fair scrap value benefits.
- Environmental and Compliance Violations: Unauthorized dismantling results in hazardous waste management issues, violating environmental norms and increasing regulatory penalties.
- Monetary Penalties and Fines: Non-compliance with vehicle scrapping license norms can attract fines of up to Rs. 50,000 or more, depending on the violations.
- Vehicle Seizure Risks: Overaged or non-compliant vehicles may be seized by authorities without compensation in strict enforcement zones.
- Continuous Challans and Liabilities: Owners may continue receiving traffic challans, tax notices, and legal claims due to incomplete de-registration.
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Talk to our ExpertsGovernment Incentives for Old/Used Vehicle Scrapping
Scrapping old/used vehicles through an authorized vehicle facility having authorization enables cost savings, regulatory compliance, and structural financial benefits, that are given below:
- Vehicle owners receive a scrap value of 4 to 6% of the new vehicle’s ex-showroom price. It is only when processed through a facility with a valid vehicle scrapping authorization
- Submission of a vehicle scrapping certificate, CoD, eliminates new vehicle registration fees and lowers the acquisition costs
- State governments provide motor vehicle tax concessions, offering up to 15% for commercial vehicles and 25% for private vehicles. It is set in alignment with the formal vehicle scrapping registration
- Automobile manufacturers may extend an additional 5% discount on new vehicle purchases against a valid certificate issued by an authorized vehicle scrapping facility with registration
- Upgrading to a new vehicle lowers maintenance and fuel costs while ensuring compliance and eliminating risks linked to unauthorized vehicle scrapping
Operational Obligations in Vehicle Scrapping Authorization
Operating under a vehicle scrapping authorization requires strict adherence to regulatory, environmental, and operational standards. See the requirements given below for each.
Pre-Approval and Eligibility Requirements:
- Entities must be legally registered to apply for vehicle scrapping registration (RVSF registration) approval
- Minimum land requirements include 4,000 sqm in an approved industrial zone
- Facilities must install non-permeable flooring, drainage systems, and depollution equipment for safe operations
- Mandatory approvals include CTE, CTO, and Fire NOC before obtaining vehicle scrapping authorization
- Secure IT systems are required for controlled and compliant access to the VAHAN database
Operational and Compliance Requirements for Authorized Vehicle Scrapping Facility:
- An authorized vehicle scrapping facility must verify ownership before accepting any end-of-life vehicle
- All vehicle details and dismantling updates must be recorded accurately in the VAHAN system
- Depollution and dismantling must follow CPCB and AIS-129 environmental and safety guidelines
- Facilities must issue a vehicle scrapping certificate after completing dismantling and processing activities
- CCTV systems must be installed with recorded data retained for at least three months
- Proper handling and disposal of hazardous waste prevent risks of unauthorized vehicle scrapping
Procedural and Licensing Obligations for Authorized Vehicle Scrapping Facility:
- Applicants must complete the online vehicle scrapping license process with proper documentation
- Authorities typically process vehicle scrapping license applications within defined regulatory timelines
- ISO certifications must be obtained within 12 months to ensure long-term compliance and operational credibility
What is the Validity of the Vehicle Scrapping Certificate?
Understanding vehicle scrapping certificate validity is essential for maintaining regulatory compliance. It prevents operational disruptions while ensuring legal authorization under the vehicle license scrappage, 2021 framework.
The validity of the vehicle scrapping certificate is 3 years from the date of issuance.
Fees Required for Vehicle Scrapping Registration
Given below are the fees required for vehicle scrapping registration-
Processing and Additional Fees
There is no direct government fee for using a vehicle scrapping certificate of deposit when processed by AVSF with authorization.
- Processing fee ranges between Rs. 1,000 to Rs. 2,500 for dismantling and compliance handling
- An additional fee ranges between Rs. 200 and Rs. 500, applied on towing and third-party assistance for de-registration
To establish an authorized vehicle scrapping facility, a formal RVSF registration and approval is required.
Registration Fee and Security Deposit/Bank Guarantee
- Registration fee Rs. 1,00,000
- Security deposit/Bank guarantee Rs. 10,00,000
This investment is mandatory to obtain a valid vehicle scrapping license and operate legally under government-approved vehicle scrapping norms.
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Book a 1:1 Virtual MeetingWhy Trust Enterclimate for Obtaining Vehicle Scrapping License?
Enterclimate delivers end-to-end compliance support to fast-track your vehicle scrapping license. It covers documentation, approvals, and audit readiness.
Our experts streamline each stage to reduce delays, eliminate compliance gaps, and ensure seamless facility setup, helping you operate efficiently, remain fully compliant and scale confidently within India’s regulated scrappage ecosystem. Still unsure? Check out why we are India’s No.1 consulting firm for securing a vehicle scrapping license-
- Zero risk of Unauthorized Scrapping
- 50+ Vehicle Scrapping Facilities Registered
- 24/7 Dedicated Expert-led Support
- 100% Compliant RVSF Registration Process
- End-to-end Vehicle Scrapping License Support
- Faster Approvals within 30 to 45 Days
- Expert Handling of Documentation Requirements
- VAHAN Integration and System Setup
- Complete Vehicle Scrapping Authorization Assistance
FAQs on Vehicle Scrapping License
Start with a fitness test at an ATS. If failed, proceed to a nearby authorized vehicle scrapping facility listed on VAHAN. You must ensure proper documentation and verified centres to complete scrapping legally and avoid delays in approval.
Yes, owners get registration fee waivers, up to 25% road tax benefits, and around 5% OEM discounts on new purchases. You will get these benefits after submitting valid proof under the vehicle scrapping license obtaining procedure.
Additional documents depend on vehicle status and ownership type. Financed vehicles require a bank NOC and loan closure proof. CVs need permits and tax clearance. Inherited vehicles require legal heirs and succession documents for smooth vehicle scrapping authorization processing.
After vehicle scrapping, you receive COD, a vehicle scrapping certificate, and a physical receipt document confirming transfer and de-registration. The vehicle scrapping certificate is essential to claim incentives and complete legal closure.
The scrappage framework in India defines eligibility based on the vehicle’s age, category and fitness results to ensure only non-compliant vehicles are removed. The eligibility for private vehicles is after 20 years, for CVs and government vehicles is 15 years.
Common issues with documents of vehicle scrapping include missing RC, pending challans and address mismatch, resulting in delays and de-registration. This is why you must implement timely correction, clear dues and updated proofs.
Authorized facilities ensure legal deregistration, issue valid certificates, and follow environmental norms. Unauthorized setups lack compliance, provide no legal proof, and increase liability risks. Choosing unauthorized vehicle scrapping can lead to penalties misuse and incomplete ownership closure.
An Automated Testing Station (ATS) is a government-approved facility where vehicles undergo fitness tests using machines instead of manual inspection. In this, it checks brakes, emissions, and the overall working condition of the vehicle. If it passes the quality checks, it can continue. But if it fails, then it must be scrapped through a regulated process.
Old vehicle de-registration is the official process of removing an unfit or end-of-life vehicle from government records. This ensures that it cannot be used, nor its ownership can be transferred, or sold illegally in the market.
To scrap a vehicle in India, take it to a registered scrapping facility and submit the required documents under a valid license. The vehicle is inspected, and if found unfit, it is destroyed or dismantled and then recycled safely. After this, you will receive a de-registration certificate with the payment of the scrap value.
