Maharashtra govt withdraws proposed 6% luxury EV tax

Maharashtra Chief Minister announced that the state government will not impose the proposed 6% tax on electric vehicles (EVs) priced above Rs 30 lakh. The decision was made after concerns were raised about its impact on EV adoption and revenue generation.

The announcement came in response to a query raised by Shiv Sena (UBT) leader Anil Parab during a discussion on EV adoption and air pollution in the Upper House. Parab argued that such a tax would contradict the Centre’s efforts to promote clean mobility and incentivise EV adoption.

The tax, originally proposed by Deputy CM and Finance Minister Ajit Pawar in the 2025-26 state budget, was intended to generate additional revenue.

Devendra Fadnavis, chief minister of Maharastra, acknowledged the concern and stated that after deliberation, the government concluded that the proposed tax would not generate significant revenue and could send the wrong message regarding the state’s commitment to electric mobility.

“It could create the impression that we are discouraging EV adoption. Therefore, the state government will not proceed with the 6 per cent tax on high-end electric vehicles,” the Chief Minister said,

The Chief Minister highlighted that Maharashtra is emerging as a key EV manufacturing hub, with major plants coming up in Pune and Chhatrapati Sambhajinagar. He emphasized that shifting from petrol and diesel vehicles to EVs would significantly reduce air pollution, as conventional vehicles are the primary contributors.

Maharashtra, the western state that houses Mumbai, India’s financial hub, already has established EV manufacturers such as Mahindra and Tata. The state has also attracted investment for new factories, including those for EVs, from Hyundai Motor and Toyota Motor.

Notably, Maharashtra accounts for more than 10 percent of total car and EV sales in the country. It also has a separate EV manufacturing policy designed to give incentives to companies to build the cars in the state.

Moreover, the government is also setting up charging stations across Maharashtra. Plus, over 2,500 electric buses will join the public transport system in stages.