Maharashtra’s Deputy Chief Minister Ajit Pawar delivered the state budget for 2025-26 today, and motorists across the state are feeling the pinch. The budget unveiled a series of motor vehicle tax hikes that will impact everything from family cars to construction equipment, signaling a shift in the state’s revenue strategy and its approach to electric vehicles.
Consumers looking for fuel-efficient options will find CNG and LPG vehicles slightly more expensive, thanks to a 1% increase in motor vehicle tax. This move, while expected to generate Rs 150 crore for the state, adds to the upfront costs for buyers.
Perhaps the most surprising move is the introduction of a 6% motor vehicle tax on electric vehicles priced above ₹30 lakh. This new tax on luxury EVs marks a departure from the state’s previous stance of encouraging EV adoption through incentives. While the government maintains its commitment to cleaner transportation, it appears to be striking a balance between environmental goals and the need to bolster revenue.
The construction and logistics industries haven’t been spared the extra burden. Construction vehicles like cranes and excavators will now face a 7% lump sum tax, a move anticipated to bring in ₹180 crore. Similarly, light goods vehicles (LGVs) capable of carrying up to 7,500 kg will also be subject to a 7% lump sum tax, with projections of ₹625 crore in revenue for the state.
In addition to these targeted increases, the budget also raises the ceiling on motor vehicle tax from ₹20 lakh to ₹30 lakh, impacting high-value vehicle purchases and adding an estimated ₹170 crore to the state’s coffers.
These changes have sparked mixed reactions. While some applaud the government’s efforts to increase revenue, others worry about the impact on consumers and the automotive industry. The higher taxes on CNG and LPG vehicles could discourage buyers seeking fuel-efficient options, while the tax on luxury EVs might dampen enthusiasm for cleaner transportation in that segment.
The increased taxes on construction and goods vehicles are likely to be passed on to businesses, potentially leading to higher prices for consumers. Industry insiders are closely monitoring the situation, anticipating adjustments in pricing strategies and sales dynamics in the coming months.
The state has been actively implementing new welfare programs aimed at improving the lives of its citizens. One notable example is the Laadli Bahin scheme, which provides financial assistance to women from economically weaker sections. These initiatives, while crucial for social development, require substantial funding. To support such programs, the state government needs to explore various avenues for increasing tax revenue.
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