Vehicle Scrapping / Recycling Facility

The Government of India is moving on the path to modernise the fleet of vehicles in circulation. The plan is to scrap the old vehicles no longer validly registered with the Ministry of Road, Transport and Highways. It introduced a program to incentivise vehicle scrapping units and recycling plants to achieve this objective. Vehicle owners can also scrap vehicles with a valid registration at will. The move is essential as it will reduce a significant amount of emissions from the environment because the emission levels of older vehicles are ten times higher than the new counterparts. All these developments make this time the best to set up a vehicle scrapping facility and vehicle recycling units.

Short Title and Application

These guidelines are called the Guidelines for Setting up, Authorization, and Operation of Authorized Vehicle Scrapping Facility (AVSF). These will apply to all vehicles and their last registered owners, owners, Automobile Collection Centers, Automotive Dismantling, Scrapping, and Recycling Facilities, and recyclers of all types of automotive waste products. These Guidelines shall come into force with effect from the date of its notification.

Under the Guidelines:

• Authorized Scrapper: means a person, firm, society, trust, or company owning and operating an Authorized Vehicle Scrapping Facility (ASVF)
• Authorized Vehicle Scrapping Facility (ASVF): means any establishment which holds an Authorization for Vehicle Scrapping issued under these guidelines for carrying out dismantling and scrapping operations.
• Certificate of Deposit: this means the certificate issued by the ASVF to recognize the transfer of ownership of the vehicle from the registered owner to the Authorized scrapper for further treatment. 
• Certificate of Vehicle Scrapping: this means the certificate issued by an AVSF to recognize the final disposal of the vehicle and is to be preserved by the Authorized Scrapper.
• End of Life-Vehicles (ELV): means all vehicles which are no longer validly registered, or their registrations are canceled under Chapter IV of the Motor Vehicles Act 1988, or due to an order of a court of Law, or self-declared by the legitimate registered owner as a waste vehicle due to any circumstances that may arise from fire, damage, natural disaster, riots or accidents, etc.
• Final Disposal: means when the treatment of the vehicles has been completed and the vehicle is no longer capable of being used and the disposal of its engine in accordance with CPCB Guidelines.
• Licensing Authority: means the Commissioner (Transport) or any other Officer designated by the Government of the State/UT. 
• Scrapping Yard: means the designated location within the premises of the AVSF where dismantled vehicle parts are processed for further treatment by way of shredders or any other machinery into scrap parts that are sold to recycling companies.
• Warehouse: means a designated location within the AVSF where processed scrap and usable parts are refurbished, cataloged, stored, and sold for re-use. 

The AVSF shall be provided connectivity and access to the VAHAN database of vehicle registration with a password user ID and must have security certifications for the IT systems for safe access to the VAHAN database. 

The AVSF shall undertake the verification of the person handing over the vehicle for scrapping to determine the bonafide of the vehicle owner and a copy of same for the record for a minimum period of 6 months.

The eligibility conditions for the grant of authorization for the treatment of end-of-life vehicles in an AVSF by the respective State/UT government are:

• The AVSF must be owned and operated by any legal entity be it a person, firm, society, or trust established with applicable laws.

The Entity Must Possess:

• Certificate of Incorporation
• Valid GST registration
• Valid PAN

The Entity:

• Should have or applied for Establishment License from the authority 
• Should meet the minimum technical requirements for collection and dismantling centers as per the pollution control board, and should have manpower and equipment to carry out dismantling activities.
• Shall undertake to obtain required quality certifications within 12 months of commencement of operations
• Should provide an approved Plant Layout and building Plan and also have an environment management plan for the facility.

Criteria for Scrapping of Vehicle:

• Vehicles that have not renewed their Original Certificate of Registration with Rule 52 of the CMVR (Central Motor Vehicle Rule).
• Vehicles that have not been granted a certificate of fitness.
• Vehicles that have been damaged due to fire, riot, natural disaster, accident, or any calamity, where the registered owner self certifies same as scrap.
• Vehicles declared as obsolete/surplus/beyond economic repair by the Central/state government is offered for scrapping.
• Vehicles bought by any agency including AVSF in an auction for scrapping of vehicles.
• Vehicles that have outlived their utility or for projects in mining, highway, power, farms, etc. may be self-certified by the owner.
• Manufacturing rejects and test vehicles may be certified by Vehicle OEM 
• Auctioned, impounded and abandoned vehicles by any Enforcement Agency.

Certificate of Vehicle Scrapping:

• The Authorized scrapper, after completing necessary treatment, will issue a Digital ‘Certificate of Vehicle Scrapping’, including a digital photograph.
• A separate record of scrapped vehicles would be maintained on the VAHAN database by the Central Government.
• The reuse/resale of any refurbished parts of an ELV including engines, obtained from the scrapped vehicle shall be in accordance with policy/guidelines/standards issued from time to time.
• The dismantling and scrapping of waste vehicles shall be carried out as per ‘Guidelines published by CPCB only in authorized scrapping yard.

The Authorization is valid for a period of 10 years, which shall be renewed for another 10 years. The Authorization shall not be transferable. 

Applicable Rules /Acts:

• The Motor Vehicle Act,1988: This Act was amended in 2019 which provides in detail the legislative provision for the license which are used for driver/conductors, for registration of motor vehicles, control of the motor vehicle through permits, traffic regulations, insurance, liability, offenses, and penalties, etc. To exercise the legislative provision of the Act, the Central Motor Vehicle Rule was made by the Government of India. This policy is against the liability which is incurred in respect of death, injury to person, or damage to any property of a third party. 
• The Act mandates that no person/owner shall drive motor vehicles unless the vehicle is registered.
• The certificate of registration shall be valid for 15 years and shall need renewal. The suspension of registration motor vehicle shall be made by registered authority if they find that use of motor vehicle may be dangerous to public. 
• The Central Motor Vehicle Rules, 1989: —A trade certificate which is granted or renewed shall be for a period of twelve months from the date of issue or renewal thereof and shall be effective throughout India. The provisions shall not apply to a person while receiving instructions or gaining experience in driving for a test of competence to drive, so long as the person is the holder of an effective learner's license issued to him and such person is accompanied by an instructor holding an effective driving license to drive the vehicle and it is painted, in the front and the rear of the vehicle or on a plate or card affixed to the front and the rear, the letter "L" in red on a white background. Every driving license is issued or renewed by a licensing authority. 
• One year from the date of commencement of Central Motor Vehicles (Amendment) Rules, 1993, any person driving a goods carriage carrying, in addition to being the holder of a driving license to drive a transport vehicle, also have the ability to read and write at least one Indian language.
• Various State and UT Motor Vehicles Rules,1993
• Indian Penal Code,1860
• The Hazardous Waste (Management, Handling, and Transboundary Movement) Rules, 2008 as amended. 
• The Ozone Depleting Substances (Regulation and Control) Rules,2000
• The Batteries (Management and Handling) Rules,2011 as amended 2016
• The Plastic Waste (Management and Handling) Rules 2016.

While this article addresses several concerns about the setup of vehicle scrapping and recycling facility, there are still some important details you should be aware of before setting up a vehicle recycling unit. At Corpseed, we recognize the importance of meeting our client's needs and offer tailored support by ensuring compliance with the relevant rules, regulations, and guidelines in effect. Our services include thorough desk-based research, documentation, and coordination to streamline the vehicle scrapping plant setup process. Corpseed serves as a comprehensive solution for all your business requirements.