The Maharashtra government, in its budget for 2025-26 on Monday, proposed to levy a motor vehicle (MV) tax of six per cent on electric vehicles (EVs) priced above Rs 30 lakh and 7 per cent tax on construction vehicles such as cranes, compressors, projectors and excavators. It also announced 7% MV tax on the price of Light Goods Vehicle (LGVs) carrying goods upto 7,500 kg in the state.
The announcements impacted the share price of companies in the capital goods and the automobile sector. While the capital goods index at BSE fell over 2 per cent on Monday, the auto index was down 1.2 per cent.
The government also proposed to increase the tax rate on individual owned four-wheelers (non-transport) operating on CNG and LPG by 1 per cent.
Presenting budget, Deputy Chief Minister and Finance Minister Ajit Pawar announced, “Motor Vehicle tax is currently levied at the rate of 7% to 9% on individual owned non-transport four-wheeler CNG and LPG vehicles depending on the vehicle type and price. It is proposed to increase this tax rate by 1%.”
While the tax on EVs, construction vehicles and light goods vehicles (LGVs) has been introduced for the first time by the state, the increase in tax on CNG/LPG privately owned vehicles is set to lift the rates from current levy of 7-9 per cent.
The proposed increase in tax on CNG/LPG vehicles is expected to generate an additional revenue of Rs 150 crore, while that on EVs a revenue of Rs 180 crore and LGVs Rs 625 crore.
The budget document said, “It is proposed to levy motor vehicle tax, compulsorily on a lump sum basis, at the rate of 7% on the price of vehicles used for construction such as cranes, compressors, projectors and excavators.”
Story continues below this ad
According to chief minister Devendra Fadnavis, “The majority of the population using four-wheelers get covered in the bracket below Rs 30 lakh. In that sense, the tax hike is unlikely to have an adverse impact on people at large.”