EVs To Cost More In This Indian State From April 1: All Details Here

Updated: Wednesday, March 12, 2025, 10:36 [IST]

From April 1, 2025, electric vehicles (EVs) that cost more than Rs 30 lakh in Maharashtra will be subject to a new 6 percent tax, as outlined in the state's 2025-26 budget announcement by Deputy Chief Minister Ajit Pawar.

This move marks a significant shift from Maharashtra's previous stance of promoting EV adoption through various subsidies and incentives. The tax change is poised to affect the pricing of high-end EVs from companies such as Hyundai, Kia, and BYD, potentially influencing Tesla's anticipated entry into the Indian market.

Tax Hike On CNG & LPG Vehicles

The taxation on private vehicles running on CNG and LPG will see an increase of 1 percent, raising the current 7 percent tax to 8 percent. This adjustment is forecasted to generate an additional Rs 150 crore in revenue for the state over the year. On the other hand, commercial vehicles powered by CNG or LPG will not experience any changes in taxation. This tax hike is part of a broader adjustment in the motor vehicle tax structure within Maharashtra, reflecting a strategic shift in the state's approach to vehicle taxation.

Other Changes To Motor Vehicle Taxation

The budget also revises the upper limit for motor vehicle tax from Rs 20 lakh to Rs 30 lakh. Consequently, purchasers of luxury cars might face up to Rs 10 lakh more in taxes, a move expected to contribute an extra Rs 170 crore to the state's coffers. Additionally, the budget imposes a 7 percent lump sum tax on construction vehicles and light goods vehicles capable of carrying up to 7.5 tonnes. This measure is predicted to bring in significant revenue, amounting to Rs 180 crore and Rs 625 crore, respectively, further bolstering Maharashtra's financial strategy.

Ajit Pawar announced, "EVs priced above Rs 30 lakh will attract a 6 percent tax in Maharashtra," revealing a major shift in the state's fiscal policies regarding the automotive industry. This adjustment in tax policy could have far-reaching implications for the adoption and sale of electric and alternative fuel vehicles in Maharashtra, signaling a new phase in the state's environmental and economic plans.

DriveSpark Thinks

Maharashtra's 2025-26 budget introduces a series of tax amendments affecting high-end EVs, CNG/LPG vehicles, and certain commercial vehicles. With the implementation of these changes, the state aims to generate additional revenue while recalibrating its approach to vehicle taxation. These measures could significantly influence vehicle pricing and consumer choices in the automotive market, marking a pivotal moment in Maharashtra's economic and environmental strategy.