Hoping to give electric vehicle sales a big push, the Gujarat Government has decided to cut the road tax on EVs from 6% to a mere 1%. The 5% road tax exemption was earlier announced in the Gujarat Budget 2025-26 and this scheme will be valid till March 31, 2026. This tax benefit does not include hybrid vehicles.
How much does the rebate translate into?
With percentages flying all over the place, we decided to sit down with pen and paper and calculate how much this 5% road tax exemption actually means when you are buying an EV. We take the example of the popular EV SUV, the Tata Punch EV. Starting at Rs 10 lakh, ex-showroom. Given the new 5% road tax rebate, the entry-level Punch EV gets an additional cut of Rs 10,000 off on the road tax. Based on this new scheme, an EV buyer only pays a 1% road tax on a new EV. Unfortunately for hybrid car buyers, there are new rebates for them.
How to apply for the EV rebate?
The process to avail of the new road tax benefit is quite straightforward and can be done in the comfort of your home. The new buyer has to log on to the Vahan 4.0 website and register the EV. Finance Minister of Gujarat, Kanubhai Desai introduced this new road tax reduction scheme so that the state can give its dwindling EV sales a boost.
According to Economic Times, Gujarat saw a drop of 43% year-on-year sales in 2024 as it registered 50,010 units as compared to 88,614 vehicles in 2023. The drop in electric vehicle sales could be tied to last year’s removal of the Rs 25,000 subsidy for electric two-wheelers and Rs 1.5 lakh for four-wheelers priced under Rs 15 lakh.
