Nitin Gadkari, the Union Minister for Road Transport and Highways, stated on Tuesday that the projected reduction in road tax under the vehicle scrappage policy will be a regulation, not an advice to states. The minister told reporters that the Centre has the authority to decide on this concession.“Under the concurrent list, we are authorised to decide on the concept of taxation,” Gadkari told reporters.
The policy offers a considerable reduction in road tax of up to 25% for personal automobiles and up to 15% for commercial vehicles.
According to the programme, any vehicle scrapped will earn a certificate that may be used to obtain further benefits on new vehicles. At the Investors’ Summit in Gujarat last week, Prime Minister Narendra Modi introduced the Voluntary Vehicle-Fleet Modernisation Program (VVMP).
The programme is estimated to bring in Rs 10,000 crore in investments to build 450-500 automated testing stations (ATS) and 60-70 registered vehicle scrapping facilities (RVSF) across the country.