Luxury Car Buyers In This State May Pay Up To Rs 10 Lakh Extra: Know the Reason

Buying a premium car in Maharashtra just got significantly more expensive. From July 1, the state government has enforced a steeper one-time tax structure on luxury vehicles and commercial goods carriers. High-end car buyers may now face a tax hike of up to ₹10 lakh, depending on the price and fuel type. The revised taxation model, which categorises vehicles into slabs based on fuel type and price, aims to streamline revenue collection while pushing for cleaner alternatives such as electric vehicles. For prospective buyers, the impact is immediate and substantial.

Steepest Increase for Premium Petrol and Diesel Cars

Under the updated rules, personal vehicles running on petrol or diesel are now taxed according to a three-tier pricing system. Petrol cars priced under ₹10 lakh will incur an 11% one-time tax. The next band—vehicles between ₹10–20 lakh—is taxed at 12%. Premium petrol vehicles priced above ₹20 lakh now attract a 13% tax rate.

Diesel-powered vehicles follow the same tiered structure but with slightly higher tax slabs. Cars in the lowest bracket attract 13%, while the mid-range is set at 14%. Diesel cars above ₹20 lakh now fall under the highest rate—15%. These incremental percentages may not seem large at a glance, but when applied to vehicles priced well over ₹1 crore, the increase adds up to a hefty additional cost.

Company-Owned Vehicles and Imports Attract a Flat 20% Tax

For vehicles registered in the name of a company or for those imported into India, the state has imposed a flat 20% one-time registration tax, irrespective of the fuel type. This measure primarily targets business-owned fleets, corporate luxury sedans, and premium imported models.

This uniform rate also applies regardless of the vehicle’s price, meaning both mid-range and high-end models under company names are now subject to one of the country’s highest state-imposed motor taxes. The government hopes this will discourage unnecessary corporate fleet expansions and reduce the number of high-emission vehicles on urban roads.

Additional 1% Tax on CNG and LNG Vehicles

While compressed natural gas (CNG) and liquefied natural gas (LNG) vehicles are often seen as cleaner alternatives, Maharashtra has added a 1% tax across all categories for these fuel types. Whether it's a hatchback or a heavy-duty transporter, the new surcharge slightly increases the overall cost of ownership for CNG and LNG-powered vehicles.

This move, though subtle, indicates a broader shift in policy that no longer treats all lower-emission alternatives equally—especially in the context of rising fuel options in India’s evolving automotive market.

Major Impact on Commercial Transport Vehicles

Perhaps the most transformative change applies to goods carriers such as pickup trucks, tempos, and construction vehicles. Earlier, these were taxed based on gross vehicle weight. Under the new rules, taxation is now based on ex-showroom price, at a flat rate of 7%.

This adjustment significantly raises the financial burden on owners of commercial transport vehicles. A ₹10 lakh pickup truck, for instance, which was earlier taxed around ₹20,000, will now attract a one-time tax of approximately ₹70,000. Transport unions and fleet operators are already raising concerns about how this could increase logistics costs across the board.

EVs Remain Fully Exempt from State Registration Tax

In a move welcomed by automakers and clean mobility advocates, electric vehicles (EVs) have been left untouched by the revised tax model. An earlier proposal to impose a 6% registration tax on EVs priced above ₹30 lakh has been shelved for now.

This means buyers of luxury EVs—from performance sedans to high-end electric SUVs—will continue to enjoy a full waiver on one-time registration taxes in Maharashtra. The decision reinforces the state’s commitment to promoting zero-emission vehicles as part of its broader green mobility mission.

Policy Outlook: Incentivising Green Choices While Boosting Revenue

While the revised tax framework is seen by many as a revenue-generating move, it also reflects an effort to push consumers towards greener vehicle choices. The rising cost of ownership for petrol and diesel vehicles—especially those in the premium segment—could drive demand for EVs, which remain exempt and increasingly accessible.

Buyers eyeing high-end models will now have to account for significantly higher registration costs, particularly if the vehicle is registered under a business name or falls in the top-tier bracket. The government appears to be leveraging fiscal policy to shape buying behaviour in favour of sustainability.