Vehicle Scrap Policy in India — Complete Guide

A Certificate of Deposit (COD) is issued by a Registered Vehicle Scrapping Facility (RVSF) after your scrapping application is accepted and verified — before the vehicle is physically dismantled. It serves as proof that you have submitted your vehicle for scrapping. You can use the COD to claim road tax rebates, registration fee waivers, and manufacturer discounts when purchasing a new vehicle. The COD is valid for 3 years from the date of issue and can optionally be traded or sold instead of used directly.

Yes. Under the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facilities) Rules, 2021, commercial vehicles older than 15 years and private vehicles older than 20 years that fail the fitness test are no longer permitted to operate on Indian roads. Owners of such vehicles are required to get them scrapped at a registered facility. While there is no blanket deadline for all vehicles at once, fitness tests are being enforced progressively, making scrapping effectively mandatory for vehicles that cannot pass.

When you present your Certificate of Deposit (COD) while purchasing a new vehicle, you are eligible for a road tax rebate of up to 25% on a new private vehicle and up to 15% on a new commercial vehicle, as announced by the Ministry of Road Transport and Highways (MoRTH). In addition, you get a waiver on the registration fees for the new vehicle. Many automobile manufacturers also offer an additional scrappage discount on top of these government benefits, which varies by brand and model.

Yes, the Certificate of Deposit is transferable. You can trade or sell your COD through the official trading portal, or at the same RVSF, to another person who can then use it to claim the applicable tax rebates and discounts when purchasing a new vehicle. The COD must be used or traded within 3 years from the date of issue, after which it expires. Trade value may vary by RVSF.

If your vehicle fails the fitness test conducted at an authorized Automated Testing Station (ATS), it is declared unfit for road use. You must then have the vehicle scrapped at a Registered Vehicle Scrapping Facility (RVSF). The RVSF accepts your scrapping application (Form 2), verifies it, and issues a Certificate of Deposit (COD) along with scrap value payment transferred to your bank account. Driving a vehicle that has failed its fitness test is an offence and may attract penalties.

Both options have merits, and the right choice depends on your vehicle's condition and your priorities. Scrapping at a Registered Vehicle Scrapping Facility (RVSF) guarantees a clean, legal exit — the vehicle is permanently deregistered from VAHAN, so there is no future liability for challans or accidents in your name. You also receive the Certificate of Deposit (COD), which brings road tax rebates and a registration fee waiver on a new vehicle purchase, and the COD can be used once, traded, or sold within 3 years. This makes scrapping a good option for vehicles that fail their fitness test or are very old and heavily damaged. Selling to a private buyer or used car dealer, on the other hand, can fetch a higher amount for a vehicle that is still in reasonably good working condition and holds resale value. The trade-off is residual risk: if the ownership transfer is not completed properly in the transport records, you could remain liable for challans or accidents involving the vehicle. Weigh the scrap incentive and legal finality of scrapping against the potential resale price and transfer risk of selling.

No. Once a vehicle is scrapped and a Certificate of Vehicle Scrapping (CVS) is issued, the vehicle is permanently deregistered from the VAHAN database and cannot be re-registered or put back on the road under any circumstances. The physical vehicle is dismantled at the RVSF and no longer exists, so re-registration is impossible.

In general, an RVSF requires proof of ownership and vehicle identity even if the registration has lapsed — for example, an old Registration Certificate or alternate ownership documents. However, a vehicle with no registration history or documents at all is generally difficult to process through the formal scrapping system, because the scrapping application (Form 2) requires a registration number lookup in the VAHAN database. Because practice can vary by state and facility, it is best to contact the relevant RVSF directly to check on a case-by-case basis whether your specific vehicle can be accepted.

Both certificates are generated and digitally signed by the RVSF within the government vscrap portal (Parivahan Sewa's Voluntary Vehicle Scrapping application). The vehicle owner can log into the same portal — using the vehicle number and Aadhaar OTP, the same login used to submit the original Form 2 application — and view and download both documents under View Certificates once they are issued. The RVSF also typically emails a copy to the registered email address whenever each certificate is generated.

The vscrap portal is part of the Ministry of Road Transport & Highways' Parivahan Sewa platform. It is the official government system where vehicle owners submit scrapping applications (Form 2) and Registered Vehicle Scrapping Facilities (RVSFs) process them, generate the Certificate of Deposit (COD), and later generate the Certificate of Vehicle Scrapping (CVS). ScrapVahan.org helps owners find and compare registered RVSFs, but the actual application, certificates, and legal process happen on the government's own vscrap portal — not on this site. ScrapVahan.org is not affiliated with the Government of India or the Parivahan portal.