CNG vehicles, EVs in Maharashtra are set to become costlier
What's the story
The Maharashtra government has announced a 1% hike in the motor tax levied on compressed natural gas (CNG) four-wheelers. An additional 6% tax will also be applied on electric vehicles (EVs) priced above ₹30 lakh. The changes were announced in the state's annual budget presented by Finance Minister Ajit Pawar and will come into effect from April 1.
Revenue projection
Move expected to boost state revenue
Pawar, who is also Maharashtra's Deputy Chief Minister, presented the first full budget of the Mahayuti 2.0 government today. He estimated that the hike in motor tax would yield an additional ₹150 crore in revenue for the state. The move is being viewed as a tactic to strengthen Maharashtra's coffers.
Market impact
Market reacts to tax hike on vehicles
The announcement of the tax increase caused a slight dip in shares of CNG and EV manufacturers and related original equipment manufacturers (OEMs). Maruti Suzuki and Mahanagar Gas (MGL) witnessed their shares fall by nearly 1%. Tata Motors suffered marginal losses while Mahindra & Mahindra's (M&M) shares declined over 1% at close.
Index decline
Nifty Auto index also affected by tax hike
The Nifty Auto index also bore the brunt of Maharashtra's tax hike on vehicles. It closed at nearly 1.22% down today, reflecting the market's reaction to these new taxes. This indicates that investors are rebalancing their portfolios in light of the impending increase in vehicle costs due to higher taxation.