The demand for vehicle scrapping has been rising in tandem with the demand for new vehicles in India. Vehicle scrapping as a business model is worth considering because it has a lot of potential both in terms of revenue generation and sustainability. The vehicle scrapping facility or business is subjected to various legal implications in India. Filing Form 1 is one such requirement that is mandatory to make vehicle scrapping facility operational in India. This article shall disclose all the details regarding the same and also provide a briefing on eligibility criteria as cited under Motor Vehicles (Registration and Working of Vehicle Stripping Service) Rules, 2021.
Eligibility criteria for registering or setting up AVSF in India
The State Government/UT Government shall consider following eligibility criteria while granting approval to any AVSF making an application under clause 6:
A. The AVSF is owned by any legal establishment, be it an individual, company, society set up according to the applicable laws.
B. The establishment must have the given documents:
(i) Certificate of Incorporation (COI)
(ii) GST registration
Additionally, the entity: –
(i) Should have applied for or secured approval for CTE (consent to establish) from the respective SPCB
(ii) Shall undertake to fulfill the underlying technical requisites for accumulations and dismantling centers as per CPCB’s guidelines.
(iii) Should have skilled workforce and required machineries to undertake de-pollution and dismantling activities in an environmentally responsible manner.
(iv) Shall undertake to secure the relevant quality certificates such as ISO 9001 ISO 14001 within a year of commencement of operations.
(v) Should have or facilitate an undertaking to secure CTO (consent to operate) from respective SPCB, within 6 months from the commencement of operations
(vi) Should undertake to adhere to the provisions of relevant labor codes and all other norms as applicable.
(vii) Shall provide proof relating to the availability of an apt useable area in the Orange category industrial zone of respective state/UT via ownership or agreement to sell or agreement for the lease of at least three years.
(viii) Should be in possession of relevant IT certificates as per clause 4 (2).
(ix) Should render certified plant layout and the building plan.
Mandatory Application Forms for Registering or Setting up AVSF
Given are the mandatory application forms that applicants need to file in given scenarios:
Form-1A: Securing authorization for registering AVSF in the respective state
Form 1: Obtaining authorization to establish AVSF in a particular state
Now let’s discuss the information that the applicant needs to furnish in these forms
Form-1A: Consent for establishing an authorized vehicle scrapping facility (AVSF)
Mandatory enclosures under Form-1A (consent for establishing authorized vehicle scrapping facility)
- Applicant name and location
- Category of tyre i.e. L Vehicle, M Vehicle, N vehicle or others
- Registration number
- Security deposit
- Conditions proposed to catered such as Facility Inspection Due, First Test Audit Due, and undertaking are to be liquidated by, etc.
Form-1 (Application to authorized Vehicle Scrapping Facility)
Form 1 seeks the following information from the applicant.
- Confirmation of whether the application is for the issuance of a new or renewed license
- Applicant’s name, address, contact details,
- Company Identification Number
- PAN and GST details
- Company status (whether it is private, society, partnership or trust)
- MOA and AOA
- National Industrial Classification Code
- Company’s existing activities
- Location (map)
- Area of the premises
- Possession status
- Address of the premises
- Category of the industrial zone
- Proposed undertaking that applicant wishes to undertake within the premises
- Proposed Capital Structure
- Proposed No of Employees
- Plant schematic reflecting operational and key areas
- Earmarked area for storing a waste vehicle
- Area for sparing segregated scrap
- Processing area
- Designated premises within the facility for the temporary storage of automotive hazardous waste
Provision for the area used for the safe movement of spares, scrap, and waste products
Equipment available within the facility
This section seeks confirmation regarding the availability of the following equipments
- Certified de-polluting equipment
- Certified de-risking equipment
- Equipment related to worker’s safety occupational health
Note: Applicant also needs to confirm the presence of Security certificates secured for IT system to ensure safe access to VAHAN database.
Confirmation about the CTE and CTO granted by SPCB
In the section, the applicant needs to confirm whether they have secured Consent to Establish and Consent to Operate from SPCB.
Application No for VAHAN Database
Here, the applicant needs to make a declaration to confirm the obtainment of quality certifications such as ISO 9001, 14001, etc., within one year of operation.
Noteworthy Facts Regarding the Application
- The concerned authority shall dispose of all registration applications within 60 days from the date of application filing.
- Form-1A shall serve as a registration certification that will be granted after the successful validation of the application.
- The processing fee is non-refundable in case of a canceled application. However, the authority shall revert the Earnest Money/Bank Guarantee submitted by the applicant for the grant of registration.
- The State or Union Territory Government, from time to time, may amend eligibility norms to ensure sustainability, apt capacity, and environmental protection.
Role of Vahan database for Vehicle Scrapper
Vahan database is a government-driven data repository of all registered vehicles in India.
- The AVSF shall be rendered connectivity & access to the said database of vehicle registration with secured credentials and shall be authorized;
- Post suitable entries relating to vehicle scrapping
- Grant of Certificate of Deposit
- Grant of Certificate of Scrapping
- The AVSF must have relevant IT security certificates to ensure safe access to the VAHAN database.
- The AVSF shall be provided the relevant connectivity to validate the details of the vehicles produced for the purpose of scrapping with the database of the stolen vehicles held by local police and NCRB. Further, AVSF is also liable to perform such verification prior to scrapping a vehicle.
- The AVSF shall undertake validation of the individual seeking vehicle scrapping to determine the authenticity of the vehicle owner or his authorized representative & keep the copy of the same for the record for a mini. of six months.
AVSF Application in Form 1 serves the applicants intending to avail authorization for registered vehicle safety facility in India. Meanwhile, the form-1A is applicable to those who aim to obtain consent for setting up a new vehicle safety facility in India.
The criteria to grant authorization to AVSF in India is somewhat hard to comply with, considering the requisites mentioned under the said Act. Thus, it would be prudent to seek expert advice on such a subject matter and then proceed accordingly. Corpbiz has a renowned name in the field of licensing and compliances. Feel free to connect with our professional just in case you grapple with complying with the above requirements.
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