Planning To Buy A CNG Car In Maharashtra? Better Hurry Up As Taxes Will Increase Soon

Quick Highlights

• Maharashtra government has revised taxation on CNG, LPG and Electric vehicles.

• CNG cars will have an added 1 percent tax on them.

• EVs above Rs 30 lakh will have 6 percent tax levied.

• Light goods and small transport vehicles will have a 7 percent tax on them.

• The maximum motor vehicle tax limit has also been proposed to be increased from Rs 20 lakh to Rs 30 lakh.

• These norms will be applicable from April 1, 2025 

Maharashtra’s 2025 budget has put the automobile industry in focus with revised motor vehicle taxation. A proposal for additional taxes on CNG and LPG vehicles, alongside revised levies on EVs above Rs 30 lakh as well as light goods and small transport vehicles, means car buyers will see an impact after the new financial year begins. 

Deputy Chief Minister Ajit Pawar has stated that this proposal is in the interest of increasing the state’s revenue. But how exactly does it affect you? What does it mean for existing car owners? We have detailed those aspects in the next section.

What Does This Mean for New Buyers?

If you're considering purchasing a vehicle in Maharashtra in the upcoming new financial year, the tax on privately owned, non-transport CNG and LPG four-wheelers will increase by 1 percent. Currently, these vehicles are taxed between 7 percent and 9 percent, depending on the vehicle type and price. For example, if you buy a CNG car priced at Rs 10 lakh, the tax would rise from an earlier mark of Rs 70,000 to a new Rs 80,000, meaning an increase of about Rs 10,000.

Does It Affect Existing Owners?

If you already own a vehicle, these tax changes should not impact you. The revised taxes are only proposed for now, and even when applied, they will only be added to the new vehicle purchases made in the next financial year, i.e., after April 1, 2025. The existing vehicle owners will continue to pay taxes based on the rates that were in effect at the time of their purchase. Therefore, there's no additional financial burden on current vehicle owners due to these changes.

(Also read: What Does Maharashtra’s Tax Increase On EVs Mean For You?) 

The CNG cars purposefully cater to the Indian middle-class masses, so added taxation might not seem ideal to them. But it’s worth considering the greater interest of supporting the state’s development, as the impact on on-road prices is expected to be minimal, hence it may not be as big a concern for urban buyers. Moreover, the Indian government had increased the income tax exemption limit, allowing people with more disposable income, which can help absorb this added cost. Also, this proposal only applies to Maharashtra, so if you're buying a car in another state, you don’t need to worry.

So, what’s your take on this move? Let us know your opinion in the comments.