KEY HIGHLIGHTS
- Maharashtra Govt drops 6% EV tax plan
- Was proposed on EVs above Rs. 30 lakhs price point
- No substantial rise in revenue one of the key reasons
Days after the Maharashtra Government proposed a 6% EV tax plan, the markets went haywire, and the discussion took the centre stage as it came at a point when various schemes aimed to boost EV sales. Notably, this was only for the premium EVs above 30 lakhs, but it is of no interest now, as the Govt. has decided to roll back the plans to incentivize the non-polluting EVs. Let's look at why it was proposed in the first phase and why it isn't going to be pursued further. But before that, make sure to join the 91wheels WhatsApp Community to never miss out on any latest news and automotive updates.
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6% EV Tax Plan Scrapped In Maharashtra: Reasons And Implications
The Maharashtra government has reversed its previously announced 6% EV tax on electric vehicles exceeding Rs. 30 lakh, a move revealed by Chief Minister Devendra Fadnavis in the state legislative council. This reversal comes after the tax, proposed in March, which drew significant discussions on the push for EVs. The government's decision aims to encourage the adoption of high-end EVs, acknowledging that the tax would have acted as a deterrent.
The initial assessment of taxing luxury EVs revealed minimal revenue generation, prompting the government to retract the levy to avoid discouraging potential buyers. As per the Govt, the registration of electric vehicles is on the rise, with over half of new vehicle registrations now being EVs. The announcement of the EV tax was when Tesla acquired a big space for its EV showroom in the country, where the base prices are slated to cross the Rs. 30 lakhs mark. Currently, electric vehicles are exempt from paying any tax, aimed at pushing EV sales up.
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Notably, Maharashtra already has a Mahindra facility where the EVs are being produced and other key players are also active. The state also has a separate EV manufacturing policy where the automakers are incentivised to open up their EV production plants in the state. This move will push for a broader adoption of EVs in the native state, ultimately aligning with the national goals.
Verdict
The proposed EV tax rollback is done after evaluations by the authorites where it was inferred that not much revenue will be generated from the sales when compared to the overall deterrent that this move could generate. Maharashtra is already going ahead with more and more EV manufacturing facilities with an aim to pioneer in this space in the long term. In short, the rollback is a morale boosting move, both for the buyers as well as the automakers.
