In the recent Gujarat state budget, an initiative has been announced that will take effect on Friday, following the completion of administrative processes.
“Under the new scheme, a person buying an electric vehicle will be required to pay just 1 per cent as vehicle tax. For instance, a vehicle with a base price of ₹12.49 lakh, which previously attracted a tax of ₹74,940, will now only require ₹12,490 in vehicle tax, resulting in savings of ₹62,450,” an official cited.
The officials of the transport department validated that the method of registration has been digitised, permitting citizens to enrol their electric vehicles via the Vahan 4.0 portal and take the tax benefit.
In the category of two-wheelers, the savings of vehicle tax shall vary from Rs 5000 and 10,000 as per the cost of the vehicle.
Minister of State for Transport Harsh Sanghavi, the decision to encourage green mobility.
EV sales dropped by 43.5 per cent in 2024, with just 50,010 units being sold compared to 88,614 in 2023. In the same year, in the first quarter, from Jan 1 to April 17, sales reduced to only 3,900 vehicles registered, officials noted.
The government of Gujarat, to improve Electric Vehicle sales, furnished a subsidy of Rs 25,000 for two-wheelers and ₹1.5 lakh for four-wheelers whose cost is less than Rs 15 lakh. Over the past year, this subsidy was discontinued.
Dealers, who preferred not to be quoted, stated that the Gujarat government’s tax reduction on electric vehicles (EVs) will significantly enhance sales. Previously, other states had also reduced vehicle taxes, leading to increased sales.
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They cited that the State has ranked between 12th and 15th in India in EV sales, though with the new incentive, it can arrive in between top 10 states.
Also, the department has lessened the tax on maxi cabs to just 6% from the current 8% and 12%. As per the officials, the same shall assist the tourism industry since maxi cabs shall become low-cost.
