Air pollution is a big problem in India, especially in cities. Thousands of people die every year due to air pollution-related diseases. Air pollution stunts growth among children and leads to respiratory and other diseases. To curb the air pollution problem a policy that proposes to take hundreds and thousands of polluting commercial vehicles off the road is likely to go for cabinet clearance soon. Under the plan, vehicles that are 20 years and older will stop plying from 2020, which will help to reduce emissions and boost the demand for new vehicles. A government official said “we have proposed to fix 20 years as the lifetime for commercial vehicles. The vehicle scrapping policy will come into force from 2020, after which any commercial vehicle that completes 20 years would go off the road, we are hoping to get the cabinet’s nod soon”.
According to estimates, there are more than 7, 00,000 commercial vehicles registered before 2000 that are currently on roads as of now. The owners of these vehicles will get incentive from the government if they replace their old fleet with new ones. The incentives include a reduction GST, fare value of scrap and a good deal from vehicle manufacturers. These incentives will take down the price of new vehicles by 15 percent on average. “Certain incentives are being worked out for people who will scrap their vehicles,” the official added. The task of setting up a scrap center will be completed by the steel ministry. He further said, “After the proposal is cleared by the cabinet, it will go to the GST Council, which will take a call on reducing the tax rate on replaced vehicles”.
Earlier the draft prepared by the Ministry of Road Transport and Highways in 2016 proposed a life of 15 years for commercial vehicles. A committee of secretaries set up to work out the details of the policy decision that it should be made mandatory for 20-year-old vehicles. “Any person willing to sell the old fleet and interested in purchasing a new one will have to submit the required vehicle documents at the scrap center set up by the ministry. After verification, the owner will get a certificate and the price for the scrap. He has to provide the certificate to the dealer while buying the new vehicle to avail the discount and tax incentive”, an official said. The government has also decided to remove state and national permits, all forms of checks, including road tax, pollution and fitness certificates. The ministry has also increased official maximum load carrying capacity for trucks and heavy commercial vehicles. The relaxed norms apply to new vehicles and not to the existing fleet. The decision will raise the load capacity for trucks and heavy commercial vehicles by 20-25 percent.
One of the main purposes to bring GST was to reduce the transportation time in transfer of goods between states. The end number of toll tax collection points in the states like Maharashtra and Kerala increased the transportation time. In the post GST period, the time wasted on toll tax collection points significantly which resulted in turnaround time going down by 20 percent. The transport sector companies have to maintain warehouses in different states to take benefits of lower taxation in one state in comparison to other. Now, since the taxation is at single rate throughout the country, the companies could consolidate their warehouses because they have to pay the same tax irrespective of the location of the warehouse.