Maharashtra Government Scraps Proposed 6% Tax on High-End EVs Amid Backlash

The Maharashtra government has withdrawn its proposal to levy a 6% tax on electric vehicles (EVs) priced above ₹30 lakh, following criticism from automobile manufacturers and environmental advocates. The tax, initially introduced in the state’s 2025-26 budget, was scrapped after concerns were raised about its potential impact on EV adoption and the state’s clean energy goals.

Deputy Chief Minister Devendra Fadnavis, who also handles the finance portfolio, announced the rollback on Wednesday, citing its limited revenue potential and possible negative consequences for the EV market. "After considering all aspects, we have decided to withdraw the 6% tax on high-end EVs. The revenue generated would have been insignificant, while the policy could have discouraged EV adoption," he said.

The proposal faced immediate opposition from various stakeholders, including auto manufacturers and political leaders. Shiv Sena (UBT) leader Anil Parab criticized the tax, arguing that it contradicted Maharashtra’s commitment to promoting electric mobility. "The state has been pushing for a transition to cleaner vehicles, and imposing additional taxes on EVs sends the wrong message," Parab said.

Industry experts also warned that the move could dampen investor confidence in Maharashtra’s growing EV sector. Luxury carmakers, which have been expanding their EV portfolios, expressed concerns that higher taxation could make electric models less attractive compared to their petrol and diesel counterparts.

While the EV tax has been scrapped, other budgetary changes affecting the automobile sector will proceed as planned. From April 1, 2025, Maharashtra will implement:

• A 1% increase in tax on CNG and LPG-powered vehicles.
• A 7% tax on construction and light goods vehicles to support infrastructure development.

These measures are expected to impact vehicle owners but are considered part of the state’s broader fiscal strategy.

Maharashtra has positioned itself as a key hub for EV manufacturing and adoption in India. The state has witnessed rising EV registrations, an expanding charging infrastructure, and increasing investments from automakers. Additionally, the government plans to introduce 2,500 electric buses into the public transport system, further solidifying its commitment to green mobility.