The Maharashtra government has revised its one-time tax structure on motor vehicles, a move that is likely to increase the cost of new vehicles — especially luxury cars, high-end bikes, and SUVs. The revised rates come into effect starting July 2025, aiming to boost state revenue but may impact automobile sales in the short term.
🏛️ What’s Changing in the Tax Structure?
The new tax rates under the Maharashtra Motor Vehicles Taxation (Amendment) Act, 2025 will be calculated based on the vehicle’s price, rather than engine capacity or weight alone — a shift toward an ad valorem system.
🔑 Key Highlights:
Luxury cars and premium SUVs will now attract a one-time tax of up to 22% of the ex-showroom price (up from 18%).
Electric vehicles (EVs) will continue to enjoy rebates, but the base tax rate is still being adjusted upward.
Two-wheelers costing over ₹2 lakh will see a hike in road tax from 11% to 15%.
Commercial vehicles and transport fleets will face a restructured slab system.
💸 Impact on Consumers
New car buyers in metro cities like Mumbai and Pune will feel the biggest pinch, especially on vehicles above ₹10 lakh.
Mid-segment buyers may shift toward entry-level models or used vehicles to offset rising costs.
Financing and EMIs will increase due to higher overall on-road prices.
🏭 Industry Reaction
Automobile dealers and manufacturers have expressed concerns over the timing of the tax hike, citing:
Recovery challenges post-pandemic
Weak rural demand in Q2 FY26
Pressure on EV sales despite ongoing subsidies
Industry associations like FADA (Federation of Automobile Dealers Associations) have requested a phased implementation or reconsideration of the slabs.
📈 Revenue vs Affordability: The State's Balancing Act
The government says the hike was necessary to:
Improve infrastructure funding
Compensate for EV tax concessions
Align with other high-GDP states like Karnataka and Delhi
However, it remains to be seen if this move will boost or burden the state’s automotive growth in the coming quarters.
🔍 FAQs
Q1: When does the new vehicle tax policy in Maharashtra take effect?
A: The revised one-time tax structure is effective from July 2025.
Q2: Which vehicles will be most affected?
A: Luxury cars, SUVs, and high-end two-wheelers will face the steepest hikes.
Q3: Are EVs still exempt from taxes?
A: EVs will continue to get rebates, but the base structure is being slightly adjusted upward.
Q4: How does this affect vehicle on-road prices?
A: The on-road cost could increase by ₹20,000–₹2 lakh, depending on the vehicle segment.
Q5: What is the government's rationale behind this change?
A: The government aims to increase state revenue, improve infrastructure, and rationalize tax slabs.
published on 1st july
Publisher : SMITA
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