Maharashtra Increases Vehicle Taxes from July 1: Big Impact on CNG, Diesel, and Luxury Cars

Car buyers in Maharashtra will pay increased one-time registration fees from July 1, 2025, as new rates will be imposed on CNG, diesel, and luxury vehicles. It is part of a new tax system announced by the state government to increase revenue generation and ease the process.

The Maharashtra state government has updated its one-time vehicle tax rules, which will result in higher prices for new vehicle purchasers in most categories. The new regulation applies to all registrations from July 1 and affects private as well as commercial vehicles.

In the revised format, customers of CNG and LNG-run vehicles will pay an extra 1% in registration duty for all varieties. For instance, a ₹10 lakh CNG vehicle that previously drew ₹70,000 as one-time tax will now rake in ₹80,000 as tax.

The biggest hit is on petrol and diesel cars, particularly in the luxury class. The tax slabs have become price-based, with the previous tax limit of ₹20 lakh being raised to ₹30 lakh. Petrol cars over ₹20 lakh will be taxed at 13%, diesel cars over the same price bracket at 15%.

The new tax slabs are as follows:

Petrol Vehicles:

• Less than ₹10 lakh: 11%

• ₹10 - 20 lakh: 12%

• Above ₹20 lakh: 13%

Diesel Vehicles:

• Up to ₹10 lakh: 13%

• ₹10 - 20 lakh: 14%

• Above ₹20 lakh: 15%

In addition, imported vehicles and those registered by companies, regardless of fuel type or price, will now be taxed at a flat 20%, making them significantly more expensive.

For business buyers, the tax regime for light goods vehicles (LGVs) has also been updated. Previously taxed on weight, LGVs with a weight of up to 7,500 kg will be taxed on 7% of the vehicle's value. This will impact businesses when they buy pickup trucks, small tempos, and construction vehicles.

Electric vehicles (EVs), however, are left alone. The previous suggestion to impose a 6% tax on EVs costing over ₹30 lakh was withdrawn. EVs thus continue to get a total one-time exemption of tax exemption in Maharashtra, making them still a good choice for eco-friendly consumers.

The government hopes to generate approximately ₹795 crore of additional revenue in the 2025 - 26 financial year because of these changes, ₹170 crore from the increase in CNG/LNG vehicle taxes, and ₹625 crore from reworked commercial vehicle taxation.

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For consumers, the impact will vary. Those buying mid-range CNG cars will see a minor increase, while buyers of luxury petrol and diesel vehicles will face substantial additional costs. Commercial and fleet buyers, too, will need to reassess budgets due to the new flat-rate system.

While the policy boosts state revenue, it also encourages a shift toward electric vehicles by keeping them tax-free, maintaining the government’s support for clean and green mobility.