Maharashtra to Increase Tax on Private CNG, LPG, and High-End Electric Vehicles from April 1

Mumbai, 10th March 2025: Buying a private CNG or LPG vehicle in Maharashtra will soon become costlier as the state government has proposed a 1% increase in motor vehicle tax for these categories starting April 1. Additionally, electric vehicles (EVs) priced above ₹30 lakh will now attract a one-time flat tax of 6%, marking a shift in the state’s taxation policy for high-end eco-friendly vehicles.

The tax hike, however, will apply only to privately owned CNG and LPG vehicles. Commercial vehicles, including autos, taxis, and buses, remain exempt from the proposed increase.

Tax Policy Changes and Revenue Projections
Announcing the changes in the state budget, Deputy Chief Minister Ajit Pawar emphasized that there would continue to be zero tax on electric vehicles costing below ₹30 lakh as part of the government’s effort to encourage sustainable mobility.

“Currently, private four-wheeler CNG and LPG vehicles attract a motor vehicle tax ranging from 7% to 9%, depending on the type and price of the vehicle. We propose to increase this tax rate by 1%,” Pawar stated.

For instance, under the existing tax structure:
A CNG car priced at ₹10 lakh currently attracts a 7% tax (₹70,000), which will rise to 8% (₹80,000) after the revision.
A CNG vehicle costing ₹20 lakh presently incurs a ₹1.4 lakh tax, which will increase to ₹1.6 lakh.
The state government expects the revised tax rates to generate an additional revenue of approximately ₹150 crore annually.

Luxury Electric Vehicles to be Taxed
A significant change in the policy is the introduction of a 6% one-time tax on electric vehicles priced over ₹30 lakh. Explaining the rationale behind this move, Pawar said, “While the state continues to incentivize the purchase of affordable electric vehicles, high-end luxury EVs should contribute to state revenues.”
For example, if an electric car costs ₹40 lakh, the buyer will have to pay ₹2.4 lakh in motor vehicle tax.

Additionally, the budget proposal raises the maximum tax ceiling from ₹20 lakh to ₹30 lakh. A senior transport department official explained, “Earlier, the upper limit for motor vehicle tax was ₹20 lakh, meaning even if a petrol or diesel luxury car’s tax calculation exceeded that amount, the owner would only pay ₹20 lakh. Now, with the revised cap at ₹30 lakh, the state stands to earn higher revenue from premium vehicles.” The state estimates this change will bring in an additional ₹170 crore in revenue for 2025-26.

Tax on Construction Vehicles
Apart from personal vehicles, the government has also proposed a 7% lump sum tax on construction-related vehicles, including cranes, compressors, projectors, and excavators. This measure is expected to generate another ₹180 crore in revenue.

With these new tax revisions, Maharashtra aims to strike a balance between promoting eco-friendly mobility and bolstering its revenue collection, ensuring that those who can afford high-end vehicles contribute more to state funds.