Overview of Vehicle Scrapping Facility Authorisation
Vehicle recycling includes dismantling, scrapping and recycling old vehicles coupled with related activities like disposal of automotive waste products. These facilities must follow guidelines as per Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021, which came into force in September 2021. Vehicle Scrapping Facility Authorisation ensures environmentally sound management of End of Life Vehicles (ELVs). A registered Vehicle Scrapping Facility (RVSF) means any establishment with registration for vehicle scrapping issued under these rules for dismantling and scrapping. The average life of commercial vehicles legally is over ten years and for private vehicles, it is 10-15 years. Vehicle Scrapping facilities are tasked with the depolluting, segregation and dismantling of material and safe disposal of non-reusable parts and finally the issuance of Certificate of Vehicle Scrapping to the registered owner of the vehicle being scrapped. Vehicle scrapping facility Authorisation can be cumbersome as it requires many procedural and legislative aspects to be taken care of.
Scope of Vehicle Scrapping Facility in India
According to the Ministry of Road Transport & Highways, there are approximately 17 lakh medium and heavy commercial vehicles (M&HCVs) older than 15 years without any valid fitness certificate. Around 51 lakh light motor vehicles (LMVs) are older than 20 years and 34 lakh vehicles are older than 15. India has merely seven automated fitness test centres and two authorised scrappage centres, which is inadequate to cater to the market. Therefore, these rules will likely boost the sale of new vehicles and the scrappage of old ones. Deregistering a vehicle was a dreadful experience for most owners who want to sell or scrap their old vehicles, discouraging many interested in discarding old ones. The newly announced Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021 have helped overcome this challenge. The Society of Indian Automobile Manufacturers (SIAM), on a similar line, announced its intention to work with the government to create an infrastructure for vehicle testing and scrappage centres across the country.
Role and Responsibilities of a Registered Vehicle Scrapping Facility
Powers and duties conferred to a Vehicle Scrapping Facility after authorisation as per the 2021 Rules and its amendment in 2022 have been summarised below.
- Vehicle Scrapping Facilities will be provided access to the vehicle registration database of VAHAN and authorised to make entries to it regarding scrapping of vehicles and issuance of Certificate of Scrapping.
- They will also be provided with a database of stolen vehicles to verify the records of vehicles that come for scrapping.
- They are recognised as facilitation centres under Central Motor Vehicles Rules, 1989.
- To perform verification of the person handing over the vehicle for scrapping to establish ownership.
- Verify the vehicle documents and records to ensure that the vehicle is not stolen.
- Have necessary cyber security certification for their IT systems for safe access to VAHAN Database.
- Registered Scrapper has to the cut piece of the chassis number and place it in safe custody for six months.
- Maintain a digital register of vehicles scrapped.
Documents Required for Vehicle Scrapping Facility Authorisation
The key documents and certificates required for Vehicle Scrapping Facility Authorisation are
- Duly filled Form I
- Certificate of Incorporation or Shop Act Registration or Udyam Aadhar
- GST registration
- Valid PAN
- Consent to Establish NOC (or proof of application)
- Proof of technical requirement for collection and dismantling centres as per CPCB guidelines.
- Proof of machinery required for depollution
- Consent to Operate from the concerned SPCB (or an undertaking to obtain CTO within six months)
- Undertaking to obtain required quality Certification of ISO 9001 or ISO 14001 or ISO 45001 within 12 months.
- Proof of occupation of premises like ownership deed/ agreement or proof of lease for 3 years)
- Approved Layout plan
- The cyber security certificate for installed IT systems
Steps for Authorisation for a Vehicle Scrapping Facility
The application goes through the following stages for the issuance of authorisation
Documents and Fee Submission
A duly filled application Form-1 addressed to the Registration Authority of the concerned State Government or Union territory Government where the RVSF will be established. A non-refundable processing fee must be submitted.
State Government or Union territory Government will clear the proposal in a time-bound manner (within sixty days) including any internal approval required from State government offices like Labour and Pollution departments
Issue of Licences authorisation / NOC
Governmental authorities will follow all necessary checks and inspections and the Registration certificate in Form-1A. The registration certificate issued will be valid for ten years, subject to the condition that the Registered Scrapper has not defaulted on any of the provisions.
How GOI is promoting Vehicle Scrapping
The government is actively providing Incentives for scrapping old vehicles like
- Vehicle manufacturers may give a 5% discount for buying new vehicles
- Zero new registration fee
- Scrap value equivalent to 4-6% of the ex-showroom price of the vehicle.
- States can give up to 25% rebate on road tax for personal vehicles and 15% rebate on road tax for commercial vehicles.
- Reduced maintenance cost and increased savings from fuel
Similarly, some disincentives for keeping old vehicles are also under consideration such as
- States can levy an additional ‘Green Tax.’
- Hike in re-registration fee for private vehicles older than 15 years
- Increase in the renewal fee of fitness certification for commercial vehicles
- Automatic deregistration of unfit vehicles
How will Enterclimate Assist You?
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Enterclimate has a highly skilled and experienced team of lawyers and environment experts and promises to provide all-inclusive support for all your legal obligations in obtaining authorisation for your Vehicle Scrapping Facility.
Counselling throughout the Process
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