Petrol, Diesel and CNG cars may cost more in Mumbai as state looks at hiking vehicle tax

Petrol, Diesel and CNG cars may cost more in Mumbai as state looks at hiking vehicle tax
The tax on petrol vehicles may go up from the existing 9-11% to 11-13% (Representational Image. Courtesy: Autocar Pro)

To make up for the post-GST loss in revenue, the Maharashtra Transport Ministry has proposed to increase the vehicle registration tax by amending the state Motor Vehicles Tax Act.

The bill, which was tabled in the assembly on Thursday, proposes to increase the tax levied on vehicles across different categories and slabs under the Maharashtra Motor Vehicle Tax Act.

According to the proposal, the increase in tax would make up for the probable loss of revenue following the abolishment of VAT and Octroi in the post Goods and Services Tax (GST) era.

It will also limit the maximum tax for all types of vehicles to Rs 20 lakh in a bid to encourage luxury car owners to register their vehicle in the state itself.

At present, owners of high-end cars often end up registering their vehicles in places like Jharkhand, Daman & Diu among others to save tax, thereby robbing Maharashtra of potential tax revenue.

As per the bill, there is a proposal to levy 11 percent tax on petrol-run vehicles with price up to Rs 10 lakh, 12 percent for vehicles that cost up to Rs 20 lakh, and 13 percent for those priced above Rs 20 lakh.

The tax for the diesel vehicle is slightly more as compared to the petrol vehicles. The proposed tax would be 10 percent for vehicles up to Rs 10 lakh, 14 percent for vehicle upto Rs 20 lakh and 15 percent for a vehicle more than Rs 20 lakh.

For the vehicles that run on CNG and LPG, the tax would be seven percent, eight percent and nine percent for vehicle up to Rs 10 lakh, up to Rs 20 lakh and over Rs 20 lakh respectively.

At present, the state levies eight to 10 percent on motorcycles and tri-cycles, nine to 11 percent on petrol vehicles, 11 to 13 percent on diesel vehicles and 5 to 7 percent on CNG and LPG-run vehicles.

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