Vehicle Scrapping Certificate

Your end-of-life vehicle needs more than just a buyer for its parts – it needs a Certificate of Deposit issued by a Registered Vehicle Scrapping Facility (RVSF) recognized under the Ministry of Road Transport and Highways’ Vehicle Scrapping Policy. Kagzikaam manages your complete scrapping documentation chain, from RVSF identification and RTO intimation to ownership transfer clearance and Deposit Certificate coordination, so your vehicle record closes cleanly in Vahan and your scrappage incentives are secured.

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Vehicle Scrapping Certificate

The Vehicle Scrapping Policy, notified by the Ministry of Road Transport and Highways under the Motor Vehicles Act, 1988, establishes a formal, regulated chain for retiring end-of-life vehicles (ELVs) from Indian roads. At the centre of this chain is the Certificate of Deposit – a document issued by a Registered Vehicle Scrapping Facility (RVSF) when a vehicle owner voluntarily hands over their vehicle for authorized dismantling. This Certificate of Deposit is what allows the RTO record to be closed, protects the previous owner from future liability on the scrapped vehicle, and – in many cases – unlocks registration fee concessions on a new vehicle purchase, as notified by the concerned state government.

An RVSF is not an ordinary scrap dealer or kabadiwala. It is a facility registered under Rule 197A of the Central Motor Vehicles Rules, 1989, with a valid Certificate of Registration issued by the relevant state authority, equipped for proper depollution, shredding, and material recovery with documented environmental safeguards. Handing your vehicle to an unregistered scrapper means you receive no Certificate of Deposit, your vehicle’s registration record stays active in Vahan, and any enforcement action or traffic challan against that vehicle number continues to reach you even after you’ve parted with it.

The scrapping process begins well before the vehicle reaches the RVSF gate. A series of RTO-side actions need to be taken first – or simultaneously – to ensure the process does not stall partway through. The vehicle owner must ensure there are no pending challans tied to the vehicle, no active hypothecation (loan) against the registration certificate, and no ongoing permit or fitness certificate complications in the case of commercial vehicles. The Registration Certificate must be surrendered to the RTO before or along with the vehicle being handed to the RVSF, since the RVSF is required to submit details of received vehicles to the Vahan portal and close the registration record. If any of these steps are skipped, the Certificate of Deposit cannot be issued by the RVSF, and the Vahan record will not close even after the vehicle has been physically dismantled.

For private vehicle owners, the path is relatively straightforward once the above pre-conditions are met – the RC is surrendered, the vehicle is handed to an RVSF, and the RVSF issues the Certificate of Deposit which is linked to the owner’s identity in the Vahan system. For commercial vehicle owners – trucks, buses, auto-rickshaws, taxis – the scrapping process involves additional clearance from the RTO for permits and fitness records, since commercial vehicles may have active route permits, national permits, and fitness certificates that need to be formally cancelled before scrapping can proceed cleanly.

A critical point that many vehicle owners miss: the scrappage incentives on new vehicle registration fee concessions – where offered by the state government – are linked specifically to the Certificate of Deposit issued by an RVSF, and not to a simple letter from a local scrap dealer. If your vehicle is eligible for these concessions and you hand it to an unregistered scrapper, you forfeit the benefit entirely. The Ministry of Road Transport and Highways has issued guidelines confirming that only RVSFs registered under Rule 197A can issue the Certificate of Deposit recognized for these concessions and for the final RC surrender and deregistration process at the RTO.

The practical challenge most vehicle owners face is identifying which facilities near them are actually registered under the policy, understanding the documentation sequence so that the RTO step and the RVSF step happen in the right order, and knowing what the RVSF is supposed to give them in return. Kagzikaam handles this sequence across major Indian cities – coordinating the pre-scrapping RTO clearance, the RVSF handover documentation, the Certificate of Deposit receipt confirmation, and the Vahan deregistration status check, so that your vehicle scrapping process has a clean paper trail from start to finish.

End-of-Life Vehicle vs. Fitness Test Failure

A vehicle can reach the scrapping stage through two broad routes. The first is a voluntary decision by the owner to retire a vehicle that is old, uneconomical to maintain, or simply past its useful life. The second is a mandated route triggered by failure to pass the fitness re-examination required under the Motor Vehicles Act – for commercial vehicles, a fitness certificate is mandatory for continued operation, and a vehicle that fails fitness re-examination or whose fitness certificate has lapsed and cannot be renewed is effectively barred from legal road use, making scrapping the most practical outcome.

In either case, the Certificate of Deposit from an RVSF is the document that closes the regulatory loop. The distinction matters because vehicles coming through the fitness failure route may have additional RTO-side clearance steps for permit cancellation before the RVSF can accept and process them, while voluntary scrapping of a private vehicle with a valid or recently expired RC is generally more straightforward to initiate.

What Happens to Your Number Plate

Under the Ministry of Road Transport and Highways’ guidelines, the RVSF is responsible for ensuring the vehicle’s High Security Registration Plate (HSRP) is destroyed or defaced as part of the depollution and dismantling process, so the number cannot be reused fraudulently. The RVSF is required to maintain a record of destroyed plates as part of its regulatory compliance with the registering authority. The owner should confirm this step has been completed and documented at the time of vehicle handover, since an intact number plate from a scrapped vehicle remaining in circulation is a liability that can come back to the original owner if it is misused.

Services

RVSF Identification and Coordination

We identify Registered Vehicle Scrapping Facilities (RVSFs) registered under Rule 197A of the Central Motor Vehicles Rules, 1989, in your city, and coordinate the handover appointment and documentation requirements specific to that facility.

RC Surrender and RTO Intimation

We handle the Registration Certificate surrender process at your concerned RTO, including challan clearance confirmation, hypothecation removal coordination, and the formal intimation to the RTO that the vehicle is being handed to an RVSF for scrapping.

Certificate of Deposit Procurement

We coordinate with the RVSF to ensure your Certificate of Deposit is correctly issued against your identity in the Vahan portal, and that all mandatory fields – vehicle number, chassis number, owner details, RVSF registration number – are accurately captured.

Commercial Vehicle Scrapping Clearance

For trucks, buses, taxis, and auto-rickshaws, we manage the permit cancellation, fitness certificate closure, and additional commercial-vehicle-specific RTO clearances required before scrapping can proceed cleanly.

Vahan Deregistration Status Confirmation

After the RVSF submits vehicle details to the Vahan portal, we verify and confirm that the registration record has been closed in Vahan, so you have documented proof that the vehicle is deregistered and no future liability can attach to you on that number.

Scrappage Incentive Documentation

Where the state government offers new vehicle registration fee concessions against a Certificate of Deposit, we ensure your documentation is in the correct form to apply for this benefit when purchasing your next vehicle.

Documents and Forms Required

Document / Form	Purpose	When Required
Original Registration Certificate (RC)	Surrendered to the RTO as part of the deregistration process before or alongside RVSF handover	Mandatory in all cases
Identity Proof of Vehicle Owner	Aadhaar, PAN, Passport, or Voter ID matching the name on the RC for verification by the RVSF and the RTO	Mandatory in all cases
Address Proof	Current residential address confirmation for the Certificate of Deposit record	Mandatory in all cases
Challan Clearance Confirmation	Proof that all pending traffic challans against the vehicle number have been settled before RC surrender	Where pending challans exist
NOC from Financer / Bank	No Objection Certificate from the lending institution confirming the loan is cleared and hypothecation removed, where the RC shows a bank or NBFC endorsement	Where hypothecation is active on the RC
Form 35 (Hypothecation Termination)	Filed at the RTO to remove the financer’s endorsement from the RC prior to scrapping, since an RC with active hypothecation cannot be surrendered for scrapping	Where hypothecation is active
Valid Insurance Policy Copy	Some RVSFs require a copy of the insurance policy at the time of vehicle acceptance to confirm the vehicle’s identity and owner details	As required by the specific RVSF
Permit Cancellation Order (Commercial Vehicles)	RTO-issued order confirming that the vehicle’s national or state route permit has been cancelled prior to scrapping	Commercial vehicles only
Fitness Certificate Closure Confirmation (Commercial Vehicles)	RTO acknowledgment that the vehicle’s fitness certificate record has been closed, preventing reissuance against a scrapped chassis	Commercial vehicles only
Certificate of Deposit (from RVSF)	Document issued by the Registered Vehicle Scrapping Facility confirming vehicle acceptance, chassis details, and owner details – used to apply for scrappage concessions on new vehicle purchase	Issued by RVSF at time of vehicle handover

Fee Structure

The scrapping and deregistration process involves RTO-side statutory charges as well as any applicable RVSF processing norms. The Ministry of Road Transport and Highways has also directed state governments to offer registration fee concessions on new vehicles purchased against a valid Certificate of Deposit, which effectively offsets a portion of the costs for owners replacing their scrapped vehicle.

Fee Component	Indicative Amount	Notes
RC Surrender / Vehicle Deregistration Fee	Varies by state and vehicle category	Charged by the RTO at time of RC surrender; some states waive this for vehicles going to registered RVSFs
Hypothecation Removal (Form 35)	Rs. 100 – Rs. 500 (varies by state)	Applicable only where an active loan endorsement appears on the RC
Challan Settlement	As per pending challans	Must be settled before RC surrender; amount varies by volume and type of pending challans
Permit Cancellation Fee (Commercial Vehicles)	Varies by permit type and state	Charged by the RTO for formal cancellation of national or state route permits
Scrappage Value from RVSF	As assessed by the RVSF based on vehicle condition and material weight	Paid by the RVSF to the owner; regulated by Ministry guidelines ensuring a minimum scrap value is offered
Registration Fee Concession on New Vehicle	Up to 25% for non-transport vehicles; up to 15% for transport vehicles (as per Ministry of Road Transport and Highways advisory to states)	Applied against new vehicle registration, not refunded in cash; available only against a valid Certificate of Deposit from a registered RVSF

Note: Fee amounts are indicative and subject to revision by the Ministry of Road Transport and Highways, state transport departments, and individual RTOs. Scrappage value offered by the RVSF depends on the vehicle’s make, age, weight, and material condition at the time of handover. Confirm the exact applicable charges with your concerned RTO and the RVSF before initiating the process.

Rules and Eligibility

The vehicle scrapping process in India is governed by the Motor Vehicles Act, 1988, as amended by the Motor Vehicles (Amendment) Act, 2019, and specifically by the Central Motor Vehicles (Eleventh Amendment) Rules, 2021, which inserted Rule 197A covering Registered Vehicle Scrapping Facilities. The following conditions govern eligibility and processing.

Who Can Apply for Vehicle Scrapping

Any registered owner of a private, commercial, or two-wheeler vehicle whose vehicle is end-of-life, unfit for further road use, or which the owner chooses to voluntarily retire, can initiate the scrapping process.
The applicant must be the current registered owner as per the Vahan record, or must be authorized by the registered owner through a valid Power of Attorney where the registered owner is unable to apply personally.
Vehicles with active hypothecation (loan endorsement on the RC) must first have the hypothecation removed with the financer’s NOC before the RC can be surrendered for scrapping.
All pending traffic challans against the vehicle must be cleared before the RC can be surrendered to the RTO.

Registered Vehicle Scrapping Facility Requirement

Only facilities holding a valid Certificate of Registration under Rule 197A of the Central Motor Vehicles Rules, 1989, can issue the Certificate of Deposit recognized for vehicle deregistration and for scrappage incentive claims. Handing a vehicle to any other entity – including local scrap dealers – does not produce a valid Certificate of Deposit and does not close the Vahan registration record.

Mandatory Vahan Record Closure

Under the Ministry of Road Transport and Highways guidelines, the RVSF is required to update the Vahan portal with the details of every vehicle received for scrapping, triggering the deregistration of that vehicle’s registration record. The vehicle owner should verify the Vahan status after the Certificate of Deposit is issued to confirm the record has been closed, since an unclosed record continues to show the vehicle as active in Vahan and may attract enforcement notices.

Commercial Vehicle Additional Requirements

Commercial vehicles – goods carriers, passenger transport vehicles, and three-wheelers used for hire – require formal cancellation of any active permits (national permit, state route permit) and closure of the fitness certificate record at the RTO before the RVSF can accept and process the vehicle. These steps are in addition to the standard RC surrender and challan clearance requirements applicable to all vehicle categories.

Scrappage Incentive Eligibility

The Ministry of Road Transport and Highways has issued advisories to state governments recommending new vehicle registration fee concessions of up to 25% for non-transport vehicles and up to 15% for transport vehicles purchased against a Certificate of Deposit from a registered RVSF. Eligibility for these concessions is subject to each state’s own notification – not all states have notified identical concession percentages, and the Certificate of Deposit must be in the name of the person purchasing the new vehicle for the concession to be applied.

Government and Defence Vehicles

Government-owned and defence vehicles follow a separate scrapping route with mandatory channelling through registered RVSFs as per Ministry of Road Transport and Highways circulars, with specific procurement and handover procedures set by the concerned ministry or department. Private vehicle owners are not affected by this track.

Vehicle Not Traceable or Stolen Before Scrapping

Where a vehicle intended for scrapping has been reported stolen and an FIR exists, the scrapping application cannot be processed until the FIR is formally closed or the vehicle is recovered. The owner of a stolen vehicle should not attempt to initiate scrapping on a vehicle they no longer possess, since this can complicate both the police investigation and the Vahan record.

Why Choose Kagzikaam

Vehicle scrapping in India is not a single-counter process – it spans your RTO’s RC surrender window, a separately registered RVSF facility, and the Vahan portal’s backend deregistration system, all of which need to be sequenced correctly for the Certificate of Deposit to be issued and recognized. For commercial vehicle owners, it also involves the permit and fitness clearance chain, which is an entirely separate department at the RTO. Most vehicle owners who attempt this unassisted either hand the vehicle to an unregistered scrapper and end up with no Certificate of Deposit, or surrender the RC before settling challans and get stuck mid-process, or miss the hypothecation removal step and find the RC cannot be accepted.

Kagzikaam pre-checks your vehicle’s Vahan record for challans, hypothecation status, and permit or fitness entries before you make a single trip to the RTO. We identify the registered RVSF nearest to your location that is currently accepting vehicles, coordinate the handover appointment, and track the Certificate of Deposit issuance and Vahan deregistration confirmation end-to-end. Every update reaches you over Whatsapp so you know exactly where your case stands – and if you are eligible for a registration fee concession on your next vehicle, we ensure your Certificate of Deposit is in the correct form to use that benefit.