Authorised/Registered Vehicle Scrapping Facility (AVSF/RVSF)

Section 59 of the Motors Vehicle Act, 1988, defines some power. It includes the power to fix the age limit of a motor vehicle. So, legally, the average life of commercial vehicles is capped at 10 - 15 years. On the other hand, for private vehicles, it is 20 years. Consequently, the automobile is deemed unfit. Thus, vehicle scrapping becomes quite important. For this reason, Authorised Vehicle Scrapping Facilities (AVSFs) were introduced. Know how to start one today and reap the rewards!

Overview of Registered Vehicle Scrapping Facility (RVSF)

India’s cities are amongst the most polluted in the world. There are many prime reasons for environmental pollution. Unfit, old and ill-maintained vehicles top the chart. Thus, phasing them out of circulation will benefit public health. It will also help in fighting against climate change.

Additionally, automobile scrapping will lead to an immense rise in the production of new vehicles. Also, their sales will skyrocket soon. This, in return, will benefit the vehicle industry and the related businesses. So, MoRTH (Ministry of Road Transport and Highways) framed the Vehicle Scrapping Policy.

For the unversed, vehicle scraping is a long process. It includes dismantling, depolluting, and safely disposing of non-reusable parts. Separation of material is also an added plus. After that, the registered automobile owner gets a 'Vehicle Scrapping Certificate'.

This calls for exercising the powers mentioned in the Motor Vehicles Act (59 of 1988). For this, the Central Government set some rules. These rules help authorise, establish, and operate Authorised Vehicle Scrapping Facilities (AVSF) in India. Eventually, the Government amended the Act occasionally.

New Amendments to the Motor Vehicles Act, 1988

The Central Government made the first amendment to the Act. This was to regulate the powers conferred by sub-section (4) u/s 59 and clause (p) u/s 64 of the MVA. These were renamed to Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility (RVSF)) Rules, 2021.

Later, the Government proposed amending the Central Motor Vehicles Rules, 1989 further. These were the Motor Vehicles (Registration & Functions of VSF Amendment) Rules, 2022. Recently, the Government has also proposed certain rules. These promote eco-friendly management of end-of-life vehicles (ELVs). These rules are for Automotive Industry Standard (AIS) 129.

Rules for establishing, authorising and operating AVSF

To start an AVSF in India, it is good to understand all the norms in detail. So, to begin with, the Government has set specific guidelines. These rules are for setting, authorising and operating AVSF. Here are the complete details.

As agreed upon, the guidelines will apply to the following:

  • vehicles that are not registered u/s 41 of the Motor Vehicles Act, 1988;
  • or the enforcement authorities to work out their statutory powers have to scrap the seized automobiles;
  • where the owners want to scrap their vehicles as any court of law instructs them.
  • Furthermore, the rules will also apply to

  • All vehicles and their last registered owners
  • Automotive Dismantling
  • Automobile Collection Centres
  • Scrapping and Recycling Facilities
  • Recyclers of all kinds of automotive waste products
  • Terms related to Registered Vehicle Scrapping Facility

    The rules further define some terms, which are as follows

    stands for any entity with a valid 'Authorisation for Vehicle Scrapping' as per the guidelines for scrapping and dismantling operations.

    implies any unit with a Registration for Vehicle Scrapping issued under the guidelines for performing scrapping and dismantling activities.

    are those vehicles whose registrations have been cancelled due to an order of a Court of Law; or under Chapter IV of the Motor Vehicles Act, 1988, or which are no longer validly registered; or are self-declared by the legitimate registered owner as a waste vehicle because of any situations that may cause due to damage, fire, riots, natural disaster, or accident etc.

    Eligibility for starting an AVSF in India

    The establishment must have a de-pollution system, preferably with a zero discharge system. Moreover, dismantling must be done using the best available technology. The technology must be used for processing the ELV, other scraps and goods.

  • environmental norms and rules stated by the MoEF&CC (Ministry of Environment, Forest and Climate Change) and CPCB/SPCB (Central/State Pollution Control Board) for such operations;
  • relevant health and safety legislation; and
  • Hazardous & Other Wastes (Management & Transboundary Movement) Rules, 2016. Discarded vehicles must be scraped and dismantled properly. It should be done as per the 'Guidelines for Environmentally Sound Management of End of Life Vehicles' (ELVs). This process must be done only in an authorised scrapping yard. These rules are issued by the Central Pollution Control Board (CPCB).

  • Essential Requirements

    Up next are some important requirements that the RVSF must fulfil.

  • The AVSF must possess security certifications for the IT Systems to access the VAHAN database securely
  • The AVSF must be given access and connectivity to the VAHAN vehicle registration database. The facility will be provided with a password-protected user ID. Additionally, it must be authorised to make suitable entries related to the vehicle scrapping.
  • The facility must verify the persons giving the automobile for scrapping. This must be done to validate the authenticity of the vehicle owner. Furthermore, AVSF must keep a copy of the same for the record for at least six months.

  • Documents Required

  • Valid GST registration
  • Certificate of Incorporation
  • Valid PAN
  • Consent to Establish (CTE)
  • No Objection Certificate (NOC) from the State Pollution Control Board (SPCB)
  • ISO 14001 (environmental certification)/ISO 9001 (quality management system)/ISO 45001 (occupational health and safety) certificate
  • Security certifications for the IT Systems for safe access to the VAHAN database
  • Should have an environmental management plan for the facility
  • Should provide approved plant layout and the building plan
  • Proof of technical requirement for collection and dismantling centres as per CPCB guidelines

  • Complete the process to get an ASVF Licence

    Follow the given steps to obtain a licence for ASVF in India.

    1. Submit the application along with FORM-1 or as stated by the designated licencing authority of the State/UT Government. This must be given to the 'Licensing Authority' of the respective State/UT where the AVSF is to be established.

    2. The application must contain –

    • Required documents
    • Processing Fee
    • An Earnest Money Deposit

    3. An authorisation will be issued in FORM -1A or as stated by the State/UT Government. This will be done upon completing the process.

    4. In case of unsuccessful applicants, Bank Guarantee/Earnest Money gets refunded. However, the processing fee won’t be refunded.

    5. Upon getting the RVSF licence, the authorised scrapper must register the facility. The facility must be registered with the concerned authority in the CPCB, the State/UT and the SPCB.

    Validity & Renewal : The ASVF Authorisation stands valid for the first ten years. However, it is renewable for another decade by using FORM -1 along with a security deposit and renewal fee.

    The process is made easy with Ecoserveindia : Although obtaining a licence for an Authorised Vehicle Scrapping Facility in India seems simple, it involves pretty complex steps. This is where Ecoserve comes into the picture. Follow these simple steps and get your job done quickly.

    • Step 1 – Contact Us and tell us your requirements in brief
    • Step 2 – Get a dedicated agent assigned who will offer customised solutions as per your needs.
    • Step 3 – Track the application status to get real-time updates.
    • Step 4 – Get notified once your job is done.

    Frequently Asked Questions

    • What are the criteria for vehicle scrapping in India?

      One can offer the following types of vehicles to the Authorised Scrapper for scrapping;

      • Vehicles damaged because of riot, fire, accident, natural disaster or any calamity, after which the registered owner self-certifies the same as scrap.
      • Vehicles not having a certificate of fitness according to Section 62 of the Act.
      • Vehicles not having renewed Original Certificate of Registration according to Rule 52 of the CMVR.
      • Vehicles bought by any agency, including AVSF, in an auction for scrapping the vehicles.
      • Vehicles declared surplus/obsolete/beyond economical repair by the Central/State agencies of the Government and have been brought for scrapping.
      • Impounded, auctioned and abandoned vehicles by any Enforcement Agency.
      • Test vehicles and manufacturing reject as may be declared by the Vehicle OEM

    • How is vehicle scrapping done in India?

      The scrapping process involves the following steps –

      1. Only an Authorised Scrapper (AS) is liable to carry out the scrapping of vehicles as prescribed for all ELVs, except impounded/ abandoned vehicles.
      2. The authorised representative or the registered owner must submit the automobile and an application as per FORM -2 in two originals to the designated collection centre or the Authorised Scrapper for deposit/treatment.
      3. If the MV has no valid registration, the designated centre or the AS must verify the identity according to the VAHAN. The Scrapper must then issue a receipt through a digital platform linked to the VAHAN database.
      4. The AS must get the vehicles impounded by an Enforcement Agency according to the procedure duly prescribed by the State/UT.
      5. The AS must get the FORM-2 and the following applicable original documents from the owner:
        • Original Fitness Certificate after the vehicle has been declared unfit for use, if applicable
        • Original Certificate of Registration
        • Authorisation from the registered owner
        • Order or certificate validating the sale of the vehicle in a public auction in his favour duly signed by the person conducting the auction.
        • Besides, the AS must get the self-certified copies through an authorised representative or from the owner of the following documents: -
        • Crossed cheque from the owner’s bank account
        • Copy of owner’s PAN Card
        • Id proof of the authorised representative
        • Digital photograph
        • Address proof of the owner
      6. The Authorised Scrapper will then return the second FORM-2 duly signed to the authorised representative or the owner. The AS then must issue the Certificate of Deposit.
      7. The owner then gets the decided amount and subsequently hand over a receipt to the Scrapper.
      8. Additionally, the Authorised Scrapper is responsible for the safe custody of the cut piece of the Chassis Number for at least six months.
      9. Moreover, the Authorised Scrapper must retain a physical and computerised scanned copy of all documents. These documents must be digitally certified by the designated officer of the AVSF and must be produced during Inspection. The records must be maintained for a period as stated in the Company's Act (2013) and its subsequent amendments.
      10. Vehicles must not be scrapped until the oil, fuel, antifreeze, other fluids, gases, etc., are drained and collected in certified standard containers.
    • Which Act/Rules apply to AVSF in India?

      Provisions of the following Act/ Rules ads their subsequent amendments apply to Vehicle Scrapping in India: -

      • The Central Motor Vehicles Rules, 1989
      • The Motor Vehicle Act, 1988
      • Various State and UT Motor Vehicles Rules, 1993
      • Indian Penal Code, 1860
      • The Ozone Depleting Substances (Regulation & Control) Rules, 2000
      • The Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008
      • The Batteries (Management and Handling) Rules, 2011
      • The E-waste (Management and Handling) Rules 2016
      • The Plastic Waste (Management & Handling) Rules, 2011
    • How is GOI promoting vehicle Scrapping?

      The Government is actively offering incentives and rewards for scrapping old vehicles. Some of these are as follows -

      • Zero new registration fee
      • Vehicle manufacturers can offer a 5% discount for purchasing new vehicles
      • States may provide up to 25% and 15% rebates on road tax for personal and commercial vehicles, respectively.
      • Scrap value equivalent to 4-6% of the ex-showroom price of the vehicle
      • Increased savings from fuel
      • Reduced maintenance cost

      Besides, the GOI takes specific steps to help discontinue the use of old vehicles in India. These are as follows -

      • States can levy an additional ‘Green Tax’ for keeping old vehicles
      • Increase in re-registration fee for private vehicles older than 15 years
      • Automatic deregistration of unfit vehicles
      • Hike in the renewal fee of fitness certification for commercial vehicles
      • The Union Budget for 2023-2024 has emphasised the Vehicle Scrapping Policy by allocating adequate funds.
    • What is Vehicle Scrap Policy?

      Vehicle Scrappage Policy emphasises removing old and unfit vehicles from the road and eventually scrapping them. Here are some salient features of the policy -

      • The policy aims to effectively and significantly lower the carbon footprint from vehicle emissions.
      • The concept behind the vehicle scrap policy is to build an ecosystem that gradually removes unfit and polluting vehicles.
      • Private and commercial vehicles over 20 and 15 years must undergo a fitness test. If these vehicles do not get clearance under the fitness test, these vehicles get scrapped.

      Note: RVSF or AVSF can participate in government auctions based on this license. This helps them to collect the used vehicles and dismantle them. They can then sell the ferrous, non-ferrous metal scrap, plastic, used tyre glass, and other waste to Authorised recyclers and reprocessors. Based on that, our Indian Government will also benefit in terms of GST collection. The Government can reap the benefits of scrap trading by adhering to proper guidelines.

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