A large-scale fraud involving government vehicle scrappage benefits has been exposed in Rajasthan, where a car dealership is alleged to have misused fake scrap certificates to illegally claim discounts meant for customers. According to an investigation, certificates were generated in the names of 53 car buyers without their knowledge, allowing discounts worth ₹50,000 to ₹1 lakh per vehicle to be allegedly siphoned off by dealers and associated agents. Authorities have now initiated a probe into the matter.
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The Modus Operandi of the Dealership
The case is linked to a Maruti showroom in Jodhpur, identified as “Shri Krishna Auto Sales.” It is alleged that the dealership created scrap certificates using details of old vehicles registered in Uttar Pradesh, Gujarat, and Delhi, and later transferred them to customers purchasing new cars in Rajasthan. This manipulation enabled the misuse of benefits offered under the government’s scrappage policy.
Officials said the customers involved had no knowledge of the certificates issued in their names. Several of them confirmed that they neither scrapped any old vehicle nor received any discount at the time of purchasing their new cars. The discovery has raised serious concerns about identity misuse and systemic loopholes in the implementation of the scrappage incentive scheme.
Exploitation of Government Incentives
Under the government’s scrappage policy, owners of old vehicles receive a Certificate of Deposit (COD) after dismantling their vehicles, which can be used to avail discounts and tax benefits on new vehicle purchases. However, investigators found that the system was allegedly exploited by generating certificates using documents and chassis numbers of already scrapped or unrelated vehicles.
Reports suggest that in some cases, customer documents such as identity cards, PAN details, bank information, and even OTPs were collected under the pretext of processing discounts. These were later allegedly used to generate scrap certificates without proper authorization.
Customers Allege Identity Misuse
Several buyers have stated that they paid full price for their vehicles but were never informed about any scrappage-based discount. Some only became aware of the alleged fraud after being contacted during the investigation.
One customer said he purchased his first car without any awareness of such a scheme and later discovered that a scrap certificate had been issued in his name without his consent. Another buyer alleged that he was promised a discount but was instead charged additional amounts, with claims that the money was required for processing scrappage benefits.
Collusion with Scrap Agencies
During the investigation, links emerged suggesting that scrap certificates are being traded in the market at prices ranging between ₹25,000 and ₹35,000, with some reportedly going as high as ₹45,000 per certificate depending on demand. Officials suspect that scrap agencies and dealership networks may be operating in coordination to generate and transfer these certificates for profit.
An interaction with representatives of an authorized scrap agency reportedly indicated that large volumes of certificates are being issued daily, raising further concerns about regulatory oversight and monitoring.
The scrappage policy was introduced to remove old, polluting vehicles from roads and promote environmentally friendly transportation. However, this case has highlighted possible loopholes that may be enabling financial exploitation of government incentives.
Official Inquiry Initiated
Transport department officials have stated that if any dealer is found to have obtained discounts using scrap certificates without customer consent, strict action will be taken. Authorities are also considering tighter regulations to prevent misuse, including limiting certificate usage based on state registration or strengthening verification mechanisms.
A formal inquiry has now been initiated, and a monitoring committee is expected to be formed to examine the functioning of scrap certificate issuance systems. Officials believe the case may point to a wider organized network involving dealerships and scrap operators.
The investigation is ongoing, and further revelations are expected as authorities trace the flow of certificates, transactions, and associated digital records.
