Car buyers in Maharashtra will face increased taxes under the 2025-26 budget. Deputy Chief Minister Ajit Pawar announced that starting April 1, passenger vehicles running on CNG and LPG will see a 1% tax increase, while commercial vehicles like buses and autos will remain exempt. Additionally, electric vehicles priced at Rs 30 lakh or more will face an extra 6% tax. Pawar stated that the revised motor vehicle tax is expected to generate Rs 150 crore in additional state revenue.
New motor vehicle tax: What to expect?
The CNG market in India has seen has tripled since 2016 with a count of around 7.5 million vehicles, representing a compound annual growth rate (CAGR) of 12 per cent. The surge in CNG usage across India is due to the increase in CNG filling stations. According to reports, in 2025, the number of stations will surpass 7,400, a leap from the 1,081 stations recorded in fiscal year 2016. This expansion reflects a Compound Annual Growth Rate (CAGR) of approximately 23.83%. Due to such expansion, the state sees this as an opportunity to generate venue with a hike of 1%. This comes on top of the existing motor vehicle tax, which currently ranges from 7 to 9% based on vehicle type and price.
With Tesla entering the Indian market, the new 6% tax on luxury electric vehicles could be a blow to the Elon Musk-led company. Other manufacturers that will face the brunt will be BMW, Mercedes-Benz, Audi and Tesla’s global arch-rival, BYD.
The 2025-26 budget has proposed a 7% motor vehicle tax on vehicles utilised within the construction industry and light goods transportation sector. The state expects to generate an additional Rs 625 crore in FY26.
