Maharashtra proposes tax hike on premium EVs, CNG & LPG vehicles to boost revenue
The Maharashtra government has proposed revisions to the Motor Vehicle Tax structure in its budget for the financial year 2025-26. As part of the new measures, electric vehicles priced above Rs. 30 lakhs will now attract a 6% tax, while taxes on CNG and LPG-powered vehicles are also set to increase.
Deputy Chief Minister Ajit Pawar, who also holds the finance portfolio, announced these changes while presenting the state budget. The revised tax structure is expected to boost revenue collection by approximately Rs. 150 crores.
Additionally, the upper limit for the Motor Vehicle Tax has been raised from Rs. 20 lakhs to Rs. 30 lakhs, a move aimed at increasing state revenue by an estimated Rs. 170 crores.
These changes indicate a shift in Maharashtra’s tax policies concerning alternative fuel vehicles. While EV adoption has been encouraged through subsidies and incentives in recent years, the introduction of a tax on premium electric models aligns with efforts to enhance state revenues. Meanwhile, the additional burden on CNG and LPG vehicle owners may impact buyers opting for these cleaner fuel alternatives.
Industry experts and consumers are likely to have varied reactions to these proposals, with some seeing them as a necessary step to boost state finances, while others may view them as a potential hurdle to the adoption of green mobility solutions. The final implementation will depend on legislative approval and potential industry feedback in the coming months.
