States to be asked to give up to 25% road tax rebate under scrappage policy

 The Centre will soon ask state governments to provide up to 25 per cent rebate on road tax for vehicles that are purchased after scrapping old vehicles under the new proposed scrappage policy

The Centre will soon ask state governments to provide up to 25 per cent rebate on road tax for vehicles that are purchased after scrapping old vehicles under the new proposed scrappage policy, with Union minister Nitin Gadkari on Tuesday asserting that giving rebate is not a political but a public interest issue.

While it was not immediately clear whether the quantum of road tax rebates would be made mandatory under the National Automobile Scrappage Policy, the Road Transport and Highways Minister said the issues related to the road tax rebate are a subject under the central government.

"As far as road tax(rebate) is concerned, it is not an advisory, we are going to make changes in the rules (to provide road tax rebate of up to 25 per cent for personal vehicles and up to 15 per cent for commercial vehicles on buying new cars on scrapping old vehicles)," Amit Varadan, Joint Secretary in the Ministry of Road Transport and Highways, said at a press conference.

He also emphasized that the central government has the power to decide principles of taxation in the concurrent list.

In March, Gadkari told Parliament that state governments may be advised to offer a road tax rebate of up to 25 per cent for personal vehicles and up to 15 per cent for commercial vehicles.

"We are authorized under the concurrent list to decide principles of taxation. So, we are making changes in the rules, and final rules will be out soon," Varadan said on Tuesday.