Updated on January 02, 2025 05:38:40 PM
Scrapping in India requires acquiring a Scrap License for a vehicle scrapping facility that is regulated by the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021. This license permits companies to scrap ELVs and to deal with them in a socially appropriate and environmentally safe way. The government’s objective is to both update the roads’ vehicles and decrease pollution through a program that favors the scrapping of pre-evaluated vehicles.
As a prerequisite to applying for a scrap license, one must undertake to be an RVSF or an AVSF. The process of application requires the applicant to complete an elaborate application and provide several documents, such as business registration documents, GST registration, and a letter of consent, among others, from the local authorities. It is usually valid for not more than ten years and renewable so that the facility complies with the existing regulations.
In India, the term ‘Scrap License ’ refers to a license that is needed to collect, purchase, sell, and process scrap of any kind. This license is among the legal structures that govern the sustainable management of scrap.
Scrap licenses can be easily procured through a formal application to the local municipal authority or the government, and scrap dealing companies or traders are required to fulfill certain legal formalities. Apart from legal formalities, environmental norms are also followed.
In India, companies that handle various kinds of waste materials need to get the right permit to work legally. The kinds of waste materials that usually need a license are:
This is the application process for obtaining a scrap License in India.
Form-1: The applicant has to complete an application form appropriately called Form-1 and hand it over to the Registration Authority of the particular state government or union territory.
Processing Fee: It is required that an application be accompanied by a non-refundable processing fee.
Applicants are required to submit various documents, including Applicants are required to submit various documents, including any one of the business registration certificates, such as the incorporation certificate, shop act registration, or Udyam Aadhaar.
It has set up a single window clearance mechanism for the submission of applications and renewals for FDI. This has been made easier by this portal, whereby the applicant can follow the status of his or her application.
After submission of the application and documents, the authorities shall peruse through all the documents submitted, conduct physical inspections as and when necessary, and ensure that all laws have been complied with.
The RVSF license is initially issued for a period of ten years and may be renewed for further terms of ten years, subject to compliance with the current legal requirements.
In India, to start a scrap business profitably it is compulsory to obtain a scrap license, which helps in compliance with rules and regulations related to environment conservation. Below is a list of key documents required for obtaining a scrap license:
The fees for obtaining a Scrap license in India depend on various factors such as the type of scrap, scale of operations, and the issuing authority. However, shown below is the breakdown of the government fees for temporary and permanent scrap licenses:
| Scrap License Government Fees | |
|---|---|
| Temporary License | ₹2,500 /Annually |
| Permanent License | ₹5,000 /Annually |
Professional Fee for the same starts at @ ₹99,000
Note: Note: The aforementioned fees are exclusive of GST.
Scrap licenses in India are a mechanism that facilitates the government’s approach to renewing the current fleet of motor vehicles as well as encouraging the use of more environmentally friendly technologies. Companies dealing with end-of-life vehicles (EVs) are well controlled through the endorsed scrap centers commonly referred to as registered vehicle scrap facilities (RVSF) and authorized vehicle scrapping facilities (AVSF).
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
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A scrap License for scrapping vehicles is a legal permit for establishing and running a registered vehicle scrapping facility (RVSF) or authorized vehicle scrapping facility (AVSF) in India. It enables the disassembly and recycling of vehicles that are no longer serviceable within the stipulated legal requirements of the environment.
Any person, partnership, or company may apply for the scrap License if they plan on establishing a vehicle scrapping center or business and they are willing, capable, and ready to fulfill the provisions of the regulations and policies provided by the law.
The process of application is to attach the completed application form, all necessary documents, and a non-refundable processing fee to the competent state authority. For this reason, the government has provided a single window clearance for this particular purpose.
It should be understood that running a scrapping facility without a scrap License is a criminal offense that involves fines, the closure of the facility, and even legal action against the operators.
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