Maharashtra scraps proposed 6% tax on luxury EVs after industry & public criticism
The Maharashtra government has decided not to proceed with its proposed 6% tax on electric vehicles priced above Rs. 30 lakhs, following widespread criticism from automobile manufacturers and concerns raised over its potential impact on the state’s green mobility agenda.
The announcement was made by Chief Minister Devendra Fadnavis in the state legislative council on Wednesday. The proposed levy, which was included in the 2025-26 state budget presented by Deputy Chief Minister and Finance Minister Ajit Pawar, aimed to generate additional revenue but quickly drew backlash from both industry stakeholders and environmental advocates.
Concerns Over EV Adoption
The proposed tax sparked concerns that it could undermine Maharashtra’s efforts to promote EV adoption and reduce vehicular emissions. During a legislative discussion on air pollution and electric mobility, Shiv Sena (UBT) leader Anil Parab criticised the move, stating it contradicted the government’s objective of encouraging the transition to cleaner transportation.
Responding to these concerns, Fadnavis clarified that the revenue expected from the tax would have been minimal and that the potential negative message it could send about the state’s stance on EVs outweighed any financial benefit.
“It could be perceived as a deterrent to EV adoption,” Fadnavis said. “Hence, the decision has been made to withdraw the proposal.”
Broader Budget Measures Still in Place
While the luxury EV tax has been shelved, other tax adjustments outlined in the state budget will be implemented from April 1, 2025. These include a 1% increase in tax on vehicles powered by CNG and LPG, along with a 7% tax on construction and light commercial vehicles.
Reinforcing Maharashtra’s EV Vision
Fadnavis reaffirmed Maharashtra’s commitment to becoming a leading hub for electric mobility. He noted the growing presence of EV manufacturing facilities in key cities such as Pune and Chhatrapati Sambhajinagar and highlighted that over 50% of new vehicle registrations in the state are now electric.
To support this growth, the government is accelerating the development of EV charging infrastructure across Maharashtra. Additionally, more than 2500 electric buses are expected to be rolled out in phases to enhance the state’s public transport system.
The Chief Minister emphasised that promoting EV adoption remains a critical component of Maharashtra’s strategy to address air pollution, with internal combustion engine vehicles being a major contributor to deteriorating air quality in urban areas.
