Maharashtra budget: Scrap old vehicles & get sops or face 100% higher green tax

Mumbai: Maharashtra's latest budget sharpened its push towards cleaner mobility by offering bigger tax breaks to buyers who scrapped old vehicles and replaced them with new ones. CM Devendra Fadnavis said the move aims to phase out less fuel-efficient and more polluting vehicles, thereby improving air quality.Under the proposal, buyers who scrapped an old vehicle compliant with BS-IV or higher emission norms and purchased a new one got a 16% concession in motor vehicle tax. The incentive rose to 30% for those scrapping vehicles with BS-III or lower emission norms before buying a new vehicle. The differential benefit was designed to encourage faster removal of older, dirtier vehicles from the roads.
At the same time, the budget signalled a tougher stance on aging private vehicles. It proposed doubling the environmental tax on old non-transport (private) vehicles with BS-IV and below emission norms, citing their higher contribution to air pollution. The state already levied a green tax on vehicles older than 15 years, and officials indicated that enforcement would tighten, including checks to ensure payment of green tax and valid fitness certificates for older vehicles. "It is proposed to increase the environmental tax on vehicles in the non-transport (private) category having BS-4 and below emission norms—from Rs 2,000 to Rs 4,000 on two wheelers, from Rs 3,000 to Rs 6,000 on light motor vehicle (petrol), and from Rs 3,500 to Rs 7,000 on light motor vehicle (diesel)," the budget mentioned. Another relief measure announced was a cap on tax under the Motor Vehicles Act for crane-mounted vehicles, limiting it to Rs 30 lakh.The state's measures built on the vehicle scrappage policy introduced by the Centre in April 2022, following its announcement in the Union Budget 2021-22. The ministry of road transport and highways later notified amendments to the scrapping facility rules in Sept 2022. Maharashtra's cabinet approved the policy in Oct 2022, and in Jan 2023 the transport department made scrapping compulsory for all govt vehicles of over 15 years. The policy was later extended to cover both govt and private vehicles.Private cars older than 20 years were eligible for scrapping, while govt vehicles older than 15 years had to be scrapped. For private owners, scrapping was voluntary. Autorickshaws were to be scrapped after 15 years, and kaali-peeli taxis after 20 years. Officials said the policy could reduce congestion, accelerate removal of abandoned "khatara" vehicles, and deliver public health and environmental gains.