A Certificate of Deposit (CD) in vehicle scrappage is a digital document issued when a Registered Vehicle Scrapping Facility records the scrapping of an eligible vehicle. Unlike a bank deposit, it does not earn interest or mature. Instead, it represents the incentives linked to the scrapped vehicle that can be claimed when purchasing a new vehicle, subject to applicable state rules and vehicle category requirements.
The CD is generated through the government’s vehicle scrappage system after the vehicle is dismantled and its registration is cancelled. The registered owner can use the certificate for eligible benefits or transfer it through the prescribed process. This makes the CD both a record of vehicle scrappage and a transferable instrument with potential monetary value.
The CD certificate is created when an RVSF records your scrapping on VAHAN. It sits in your VSCRAP account with an issue date and an expiry date. From there you either use it against a new vehicle registration or transfer it once to a buyer who will.
Four steps take it from issue to use:
The RVSF scraps and records: The facility dismantles the vehicle, reports it on VAHAN, and the registration certificate is cancelled.
The certificate is generated: A Certificate of Deposit is issued digitally on the VSCRAP portal in the registered owner's name.
You choose a route: You either present it at the dealership and RTO on a new purchase, or open the Trade option to sell it.
The transfer is recorded: On a sale, a Transfer Certificate of Deposit in Form 2D is generated and the benefits pass to the buyer.
The certificate carries the details a buyer checks before bidding. It shows the CD number, the issue and expiry dates, the vehicle make and model, the vehicle category, and the gross vehicle weight. The RVSF issues a separate Certificate of Vehicle Scrapping alongside it, which records the scrapping but carries no incentives.
None of this runs offline. Every step is recorded against the vehicle record, which is why only a MoRTH-authorised facility can start it. Thecar scrapping policy in India sets the same sequence for every private vehicle.
There is one instrument, issued in two forms and across vehicle categories. The two forms are the Original Certificate of Deposit, issued to the owner who scrapped the vehicle, and the Transfer Certificate of Deposit in Form 2D, generated when it changes hands. Categories follow the vehicle class.
Type or category | What it means |
Original Certificate of Deposit | Issued by the RVSF to the registered owner when the vehicle is scrapped and recorded on VAHAN. |
Transfer Certificate of Deposit (Form 2D) | Generated when the certificate is sold, naming the buyer as the party entitled to the benefits. |
Two-wheeler category | Certificates from scrapped motorcycles and scooters, where the tax base on a replacement is smaller. |
Light motor vehicle (LMV) category | Certificates from cars and small commercial vehicles bought for private use. |
Medium and heavy vehicle categories | Certificates from trucks and buses, where the transport vehicle concession rate applies instead. |
Category matters at the point of use. Several state notifications require the new vehicle to be in the same category and class as the one scrapped, so a two-wheeler certificate may not carry across to a car. The end-of-life vehicle rules set out which vehicles qualify in the first place.
The certificate carries four announced benefits, and three of them are claimed only when you register a new vehicle. The fourth is that the certificate itself is tradeable. That combination is what gives it a market value rather than only a paperwork value.
Motor vehicle tax concession: MoRTH set a ceiling of 25 percent for non-transport and 15 percent for transport vehicles, and each state fixes its own rate within it.
Registration fee waiver: The fee on the new vehicle is waived under Rule 81 of the Central Motor Vehicles Rules 1989.
Manufacturer discount: Vehicle makers offer a discount against the certificate, with a window of one year for passenger vehicles and two years for commercial vehicles.
Waiver of pending liabilities: MoRTH announced relief on dues linked to the scrapped vehicle, with application varying by state.
Where the money actually comes from is worth being clear about. The certificate does not pay out on its own. Its value is the saving a buyer makes at registration, which is why the price a seller can ask tracks the buyer's state rate rather than the scrapped vehicle's condition.
The concession period runs 15 years for non-transport and 8 years for transport vehicles. Maharashtra announced 30 percent for BS3 and older vehicles in its 2026-27 budget, which shows how far state rates move. Owners not buying a replacement can arrange a Certificate of Deposit trade instead.
The certificate expires, transfers only once, and returns nothing on its own until somebody registers a new vehicle against it. Those three limits shape every decision a holder makes. None of them is a flaw in the instrument, but all three catch owners out.
Validity is two years from issue under the Motor Vehicles Amendment Rules 2022. The manufacturer discount window is shorter, at one year for passenger vehicles, so part of the value goes before the certificate does. Holders who wait for a better price often lose more than they gain.
Value is also outside your control. It tracks what a buyer can claim, which depends on the state they register in and the vehicle category they buy. Owners whoscrap a two-wheeler hold the same instrument on a smaller underlying sum.
Two further conditions narrow the buyer pool. Several state notifications require the new vehicle to sit in the same category and class as the one scrapped. Offline sale is not permitted either, so a private arrangement with a neighbour is not an option even when both sides agree.
A vehicle scrappage Certificate of Deposit has no term to select in the way a bank deposit does. What you choose is timing and route: when to use or sell it, and whether to take an instant price or wait for offers. Four things decide that.
Whether you are buying: If a new vehicle is already planned within the year, using the certificate yourself captures all four benefits.
How much validity is left: Buyers pay more for a certificate with time on it, so the price falls as the two-year window closes.
Which state the buyer registers in: State tax rates differ, so a buyer in a higher-rate state can pay more for the same certificate.
Price discovery against speed: Listing for offers takes longer than an instant sale but typically returns a better number.
The two selling routes work differently. An offer listing puts your asking price in front of registered buyers, who bid against it, and you accept or reject each bid. An instant sale executes at the price available on the platform at that moment, with the transfer completed immediately.
A sale also carries deductions. The platform applies its transaction fee, GST on that fee, and tax deducted at source, so the amount credited to you is lower than the headline price agreed with the buyer. Check the fund ledger entry after the trade to see the split.
The instrument is simpler than its name suggests. It is a record of a scrapped vehicle that the rules have made tradeable, with two deadlines attached to it. Everything else follows from which deadline is closer.
Check the issue date on your certificate before anything else. That date tells you which deadline falls first, the one-year manufacturer window or the two-year validity, and therefore whether holding out is worth it. Owners who decide to move cansell the scrap certificate on DigiELV, where buyers registering new vehicles bid against each other.
It is the document an RVSF issues when your vehicle is scrapped and recorded on VAHAN. It carries road tax, registration fee, and manufacturer benefits on a new vehicle.
The registered owner of the scrapped vehicle. The record must be clean of hypothecation, pending dues, criminal entries, and blacklist flags before the facility accepts the vehicle.
You do not apply separately. The RVSF generates it on the VSCRAP portal once dismantling is recorded and the registration certificate is cancelled on VAHAN.
A motor vehicle tax concession at your state's rate, a registration fee waiver under Rule 81 of the Central Motor Vehicles Rules 1989, and a manufacturer discount where offered.
Two years from issue under the Motor Vehicles Amendment Rules 2022. ELV owners can use or trade it nationally on DigiELV, the MoRTH-authorised platform, though state tax rates and category conditions differ.