Maharashtra's Motor Vehicle Tax: High-End EVs, CNG, And LPG Cars To Face New Rates From April

On Wednesday, the Maharashtra government introduced a bill in the state assembly to amend the Motor Vehicle Act. This amendment, as announced in the state budget earlier this month, will impose a tax on high-end electric vehicles (EVs) and raise taxes on private vehicles running on CNG or LPG. The new tax rates are set to come into effect on April 1, as per a report shared by Hindustan Times (HT).

The government expects to generate approximately Rs 1,300 crore annually from these changes.

The amendment includes a 1 per cent increase in the motor vehicle tax for privately owned CNG and LPG vehicles. Currently, these vehicles are taxed between 7 per cent and 9 per cent, depending on the vehicle type and price. In addition, EVs, which were previously untaxed under government policy, will now be subject to a 6 per cent tax if their price exceeds Rs 30 lakh.

The new rules also introduce a one-time tax for light motor vehicles carrying goods weighing up to 7,500 kg, replacing the annual tax. An official from the state transport department explained that the upper limit for motor vehicle tax, which ranges from 11 per cent to 20 per cent depending on the vehicle type, was previously Rs 20 lakh. However, for high-end vehicles worth more than Rs 2 crore, the maximum tax has now been raised to Rs 30 lakh.

The official further stated that the state had not increased taxes on new vehicles in over two decades. Electric vehicles were previously exempt from motor vehicle tax, but this will now only apply to high-end EVs. The amendment also includes penalties for non-payment of the tax, ranging from Rs 300 to Rs 500, along with the recovery of the tax owed.

Once the bill is passed by both Houses of the state legislature, the additional tax will be enforced starting April 1. This move follows the announcement made by state finance minister Ajit Pawar during his budget speech on March 10.