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Committee of Secretaries to take up fleet policy for nod this week

The fleet modernisation proposal mooted by the roads transport and highways ministry has been awaiting clearance for almost a year now.

, ET Bureau|
Last Updated: Feb 07, 2017, 12.47 AM IST
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The committee has secretaries from the ministry of finance (revenue secretary), environment, steel, heavy industry, roads and law ministry as its members.
The committee has secretaries from the ministry of finance (revenue secretary), environment, steel, heavy industry, roads and law ministry as its members.
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NEW DELHI: The Committee of Secretaries (CoS) will take up for approval the fleet modernisation policy that proposes to remove old and polluting trucks and other commercial vehicles bought before April 2005 from the roads.

The fleet modernisation proposal mooted by the roads transport and highways ministry has been awaiting clearance for almost a year now. The committee has secretaries from the ministry of finance (revenue secretary), environment, steel, heavy industry, roads and law ministry as its members.

“The policy will be taken up by the CoS on February 9. It will not only cut pollution by taking polluting vehicles off the roads but will also increase the revenues of the government because the lifecycle of the vehicles would be fixed. Auto companies will also have increased sales,” road transport and highways minister Nitin Gadkari said.


Under the proposed policy, commercial vehicles bought before April 2005 will be eligible for incentives if replaced by new ones. According to government estimates, the programme may help replace several million vehicles with lesspolluting ones, thereby reducing vehicular emission. The proposal will also be put before GST Council as the scheme offers tax incentives.

The policy proposes three incentives for the vehicles scrapped — half the regular excise duty at the time of purchase of new vehicle, fair value for the scrap and discounts from automobile manufacturers. These incentives are likely to cut the cost of a new vehicle for the buyer by 15% on an average.

The transport ministry last year released the first draft of the proposed policy. It recommends complete excise exemption for state transport buses to encourage public transport to shift to newer and higher capacity buses which will also help de-congest roads. Under the plan, those opting to scrap old commercial vehicles will have to deposit documents relating to the vehicle at the recycling centre. After verification, the owner will get a certificate and the price for the scrap. He has to provide certificate to the dealer while buying the new vehicle to avail of the discount.

According to the ministry, the policy has the potential to reduce vehicular emission by 25% and save oil consumption by 3.2 billion litres a year. “The reduction in oil consumption by new vehicles will help save nearly Rs 7,000 crore in oil import,” said the concept note on the policy by transport ministry. “We will soon make a presentation to the GST Council as well,” Gadkari said.
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