Gujarat has introduced a 5% vehicle tax exemption for electric vehicles until March 2026, aiming to boost sales after a significant decline. Buyers will now pay only 1% vehicle tax, resulting in substantial savings. The registration process is digitized through the Vahan 4.0 portal.
- Updated On Apr 19, 2025 at 12:51 PM IST
The officials noted that EV sales decreased by 43.5% in 2024, with only 50,010 units being sold compared to 88,614 in 2023.“>
The state govt has rolled out a 5% vehicle tax exemption for buyers of fully electric vehicles until March 31, 2026, to boost their sales. The initiative, announced in the recent state budget, came into effect on Friday after the completion of administrative procedures.”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 Rs 12.49 lakh, which previously attracted a tax of Rs 74,940, will now only require Rs 12,490 in vehicle tax, resulting in savings of Rs 62,450,” an official said. Transport department officials confirmed the registration process has been digitised, allowing citizens to register their electric vehicles through the Vahan 4.0 portal and avail of the tax benefit. They added that in the two-wheeler category, the vehicle tax savings would range between Rs 5,000 and 10,000, depending on the cost of the vehicle. Minister of state for transport Harsh Sanghavi said the decision was made to boost green mobility.
The officials noted that EV sales decreased by 43.5% in 2024, with only 50,010 units being sold compared to 88,614 in 2023. This year, in the first quarter, from Jan 1 to April 17, sales declined sharply with only 3,900 vehicles registered.
To boost EV sales, the Gujarat govt initially provided a subsidy of Rs 25,000 for two-wheelers and Rs 1.5 lakh for four-wheelers priced below Rs 15 lakh. This subsidy was discontinued over the past year.
Dealers, refusing to be quoted, said that the tax reduction on EVs by the Gujarat govt will improve sales to a great extent. Earlier, other states had also slashed the vehicle tax, resulting in increased sales.
They said that Gujarat ranked between 12th and 15th in India in EV sales, but with the new incentive it could be among the top 10 states.
Additionally, the department has reduced the tax on maxi cabs to just 6% from the existing 8% and 12%. The officials said this would help the tourism industry as maxi cabs would become cheaper.
- Published On Apr 19, 2025 at 12:48 PM IST
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