Buying an EV or CNG Car? Expect to Pay More in Maharashtra

The Maharashtra government has announced an increase in motor vehicle taxes as part of its annual budget, making electric and CNG vehicles more expensive in the state. Deputy Chief Minister and Finance Minister Ajit Pawar presented the budget, stating that these tax hikes generate additional revenue while ensuring that lower-income groups are not significantly affected.

The government has introduced a one per cent tax increase on purchasing individually owned CNG and LPG non-transport four-wheelers. Currently, Maharashtra levies a 7-9% tax on these vehicles, and the new hike is expected to generate an additional ₹150 crore annually.

In the case of electric vehicles (EVs), a 6% tax will be imposed only on EVs priced above ₹30 lakh, while EVs costing less than this threshold will remain tax-exempt. This move is expected to bring in ₹170 crore in additional annual revenue.

Further, the budget proposes a 7% lump sum motor vehicle tax on the purchase of construction-related vehicles such as cranes, compressors, projectors, and excavators, which is projected to generate ₹180 crore in revenue. A similar 7% tax will also be imposed on light goods vehicles, which are estimated to contribute ₹625 crore in the fiscal year 2025-26.

Finance Minister Ajit Pawar defended the decision, stating that the increased taxes primarily target buyers of high-end vehicles rather than the general public. He emphasised that individuals purchasing premium electric cars above ₹30 lakh or high-end CNG vehicles can afford the additional tax burden. 

“It is true that in this budget, we imposed and increased the taxes on vehicle purchases, but we have ensured that these taxes are not for the poor people. The people who buy high-end vehicles and can afford the taxes are the ones who need to pay,” said Pawar. 

The Maharashtra government anticipates a total revenue boost of over ₹1,500 crore annually from these revised motor vehicle taxes. The funds are expected to support infrastructure development, road projects, and other state initiatives. 

The increased taxes could raise the overall cost of electric and CNG vehicle purchases, potentially affecting consumer demand in these segments. While Maharashtra has been promoting electric mobility through various incentives, the new tax on high-end EVs may influence purchasing decisions, especially among premium buyers.