Gujarat Offers Up To 50% Motor Tax Rebate on New Vehicles For Scrapping Old Vehicles

Gujarat government has approved up to 50% motor vehicle tax relief on new vehicles against official scrapping of eligible BS-I and BS-II vehicles.

Tax Rebate Linked To Vehicle Scrappage

The concession will apply when a new vehicle is registered against the official scrapping of a Bharat Stage-I, older or Bharat Stage-II vehicle in Gujarat.

To claim the benefit, vehicle owners must have a valid Certificate of Deposit issued on or before March 31, 2027.

Over 2 Crore Vehicles Registered In Gujarat

More than 2 crore vehicles are registered in Gujarat. In 2022, the state government told the Assembly that 41.20 lakh vehicles were 15 years old or more.

Separate official figures for BS-I and BS-II vehicles are not available. BS-I standards came into force around 2000, while BS-II standards followed in 2005. The categories covered under the provision mainly include medium and heavy goods and passenger vehicles.

How The 50% Tax Relief Works

The concession will reduce the motor vehicle tax payable when an eligible new vehicle is registered.

For example, if a new car costs ₹10 lakh and attracts motor vehicle tax of around ₹27,500 at 2.75%, a 50% concession would reduce the tax payable to ₹13,750.

For private vehicles in Gujarat, lifetime tax is generally calculated as a percentage of the vehicle's original cost.

Certificate Of Deposit Required

The Certificate of Deposit is issued after an eligible old vehicle is officially scrapped. Vehicle owners will have to produce the certificate during registration of the new vehicle to claim the tax concession.

The same scrapped vehicle cannot be used again to claim the concession if the benefit has already been granted on the basis of its Certificate of Deposit.