Maharashtra car buyers will face higher taxes starting April 1, 2025, according to the state’s budget for the fiscal year 2025-26. Deputy Chief Minister Ajit Pawar announced the new tax structure, which includes a 1% increase for passenger vehicles running on compressed natural gas (CNG) and liquefied petroleum gas (LPG). Commercial vehicles like buses and autos will remain exempt from this increase.
In addition, the budget introduces a 6% tax on electric vehicles (EVs) priced at Rs 30 lakh or more. This tax targets the luxury EV market and could impact manufacturers like Tesla, BMW, Mercedes-Benz, Audi, and BYD.
Pawar stated that the revised motor vehicle tax is anticipated to generate an additional Rs 150 crore in revenue for the state. This 1% hike can be understood in the context of a growing CNG market in India. In fact, the CNG market has nearly tripled since 2016, with approximately 7.5 million vehicles currently running on the fuel. This growth represents a compound annual growth rate (CAGR) of about 12%.
The expansion of CNG infrastructure has fueled this growth. The number of CNG filling stations has increased dramatically. Reports indicate that by 2025, the number of stations will surpass 7,400, far outpacing the 1,081 stations reported in fiscal year 2016, which translates to a CAGR of roughly 23.83%. The state sees this expansion as an opportunity to increase revenue via the 1% tax hike, which is imposed on top of the existing motor vehicle tax that typically ranges from 7% to 9% depending on the vehicle type and price.
The 2025-26 budget also proposes a 7% motor vehicle tax on vehicles used in the construction industry and for light goods transportation. The state expects this to generate an additional Rs 625 crore in the next fiscal year.
