Maharashtra Budget: CNG, LPG Cars to Get Costlier, High-End EVs Face 6% Tax from April 1

The Maharashtra government has announced an increase in the Motor Vehicle Tax for private CNG and LPG vehicle owners, raising it by 1%. This tax adjustment applies solely to non-commercial vehicles, excluding public transport options such as auto-rickshaws, taxis, and buses. The move is expected to impact buyers looking for more economical and eco-friendly fuel alternatives.

High-End Electric Vehicles to Attract 6% Tax

Luxury electric vehicle (EV) owners will also face higher costs, as the state has introduced a one-time 6% tax on EVs priced above ₹30 lakh. This move comes at a time when EV adoption is increasing, and Maharashtra has been a significant proponent of electric mobility. While the rationale behind the tax is revenue generation, it may also impact the demand for premium EVs.

Increased Tax on Construction and Light Goods Vehicles

Apart from private vehicles, the state budget also introduced a 7% tax on vehicles used in construction activities. This is expected to generate approximately ₹180 crore in additional revenue. Additionally, light goods vehicles (LGVs) carrying goods up to 7,500 kg will now be taxed at 7%, bringing in an estimated ₹625 crore for the state’s coffers.

Revised Tax Limits for Motor Vehicles

To further boost revenue, the Maharashtra government has raised the maximum Motor Vehicle Tax limit from ₹20 lakh to ₹30 lakh. This change is projected to generate ₹170 crore in additional tax collections.

Revenue Expectations from the Tax Changes

The combined tax revisions on CNG, LPG, EVs, and commercial vehicles are expected to contribute significantly to Maharashtra’s budget. The government estimates the 1% tax hike on private CNG and LPG vehicles will generate ₹150 crore in the fiscal year 2025-26. Meanwhile, the taxation of LGVs and construction vehicles will add a substantial boost to the state’s revenue.

Conclusion: Implications for Vehicle Buyers

With these new tax regulations coming into effect from April 1, vehicle buyers in Maharashtra may need to reassess their purchase decisions. While the increase in tax on CNG and LPG vehicles remains moderate, high-end EV buyers will face a more significant cost burden.

The state’s decision aligns with its broader fiscal objectives, balancing revenue generation while maintaining incentives for public transport and sustainable mobility options.

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