Ahmedabad spends ₹7,538 cr on vehicles, outpaces state transport budget

However, tax avoidance persists, with many buyers registering vehicles in nearby areas like Bavla to escape higher municipal vehicle taxes.

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The city’s big-buck mobility power is demonstrated by the fact that in 2025-26 Amdavadis bought vehicles worth ₹7,538 crore, which vrooms past the ₹4,314 crore budget of the state’s ports and transport department for the current financial year. The estimate of the money spent on vehicles has been derived from municipal vehicle tax collections.

Corporation officials said that Amdavadis spent ₹6,813 crore on vehicles in 2024-25. In the financial year 2025-26, the AMC collected ₹239.3 crore in vehicle tax from 2.98 lakh vehicles registered with the Subhash Bridge and Vastral RTOs.

The AMC levies a vehicle tax ranging from 2 per cent to 5 per cent. Two-wheelers, autorickshaws, loading rickshaws, four-wheeler loading tempos and mini trucks attract a vehicle tax of 2.5 per cent of the basic price. For cars, the vehicle tax ranges from 2 per cent to 5 per cent depending on cost.

Cars priced above ₹50 lakh attract 5 per cent vehicle tax, and those priced between ₹25 lakh and ₹49.9 lakh are subject to 4 per cent tax.

The officials said that the tax collection from vehicles this year was around ₹15 crore higher than in the previous year, when ₹224.8 crore was collected for 2.6 lakh vehicles. The figures indicate both a rise in the number of vehicles being registered and an increase in the value of vehicles being purchased in the city.RTO officials said most cars registered in Ahmedabad fall in the 2.7 per cent to 4 per cent vehicle tax bracket, indicating that the vehicles’ basic prices are above ₹8 lakh and up to ₹49.9 lakh. This suggests that the demand remains strong in the mid-range and premium passenger vehicle segments.

Officials also pointed to a growing appetite for luxury vehicles. In 2025-26, around 4,631 luxury cars were registered in the city, about 7 per cent higher than the 4,333 recorded in 2024-25. According to officials, higher ground clearance, stronger road presence, feature-rich models, and easy loan availability have contributed to the rise in sales of premium vehicles.

At the same time, tax officials said a substantial number of vehicle owners continue to avoid registering vehicles within Ahmedabad to dodge corporation tax. The official data does not include vehicles registered under the GJ-38 series, which covers Bavla, because those vehicles do not pay the AMC vehicle tax.

In 2025-26, about 55,000 vehicles were registered in Bavla. Officials said many of these vehicles are used by Ahmedabad residents but are registered at addresses in nearby villages. “For a ₹35 lakh vehicle, one must pay ₹1.4 lakh to the corporation, and this amount is equivalent to the insurance amount,” an RTO officer said. “Hence, some people register vehicles in Bavla.” Officials said that the number of vehicles bought by Amdavadis may be even higher than the tax-based estimate suggests as the estimate only factors in the base value.

Among other levies, buyers have to pay the RTO tax and vehicle tax and buy insurance. The total additional expenditure works out to be nearly ₹5 lakh for a ₹35 lakh vehicle. As for electric vehicles, they remain outside the vehicle tax net, as Ahmedabad collects zero vehicle tax on EVs. The exemption has been extended for 2026-27.