Mumbai: The Maharashtra government has proposed significant motor vehicle tax reforms in the State Budget 2025-26, aiming to generate an additional ₹1,125 crore in revenue. The revised tax structure will impact CNG, LPG, electric, construction, and light goods vehicles (LGVs).
Key Motor Vehicle Tax Reforms:
1. Increase in Motor Vehicle Tax on CNG & LPG Vehicles: Currently, the tax on non-transport four-wheeler CNG and LPG vehicles ranges between 7% and 9%. The budget proposes a 1% increase in this tax rate. Expected additional revenue: ₹150 crore.
2. Introduction of Motor Vehicle Tax on High-End Electric Vehicles: A 6% tax will be levied on electric vehicles priced above ₹30 lakh.
3. Increase in Maximum Limit of Motor Vehicle Tax: The maximum tax limit on vehicles will increase from ₹20 lakh to ₹30 lakh. Expected additional revenue: ₹170 crore.
4. Tax on Construction Vehicles: A 7% lump sum tax will be imposed on vehicles used for construction, including cranes, compressors, projectors, and excavators. Expected additional revenue: ₹180 crore.
5. Tax on Light Goods Vehicles (LGVs): A 7% lump sum tax will be imposed on LGVs carrying goods up to 7,500 kg. Expected additional revenue: ₹625 crore.
The Maharashtra government has justified these tax revisions as a necessary step to boost revenue and fund infrastructure projects. The additional income will be utilised for road development, urban transport improvements, and environmental sustainability initiatives.
While green energy adoption remains a priority, the tax on high-end electric vehicles ensures that luxury EV buyers contribute fairly to state revenue. Similarly, the tax hike on CNG and LPG vehicles, light goods vehicles, and construction machinery is aimed at strengthening the state’s fiscal position.
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