The Maharashtra government has decided to increase Motor Vehicle Tax (MVT) by 2 per cent for vehicles costing up to ₹20 lakh. Luxury vehicles are exempt from the tax hike.
The tax increase is an attempt to compensate for the revenue loss that the state treasury will incur due to the abolition of octroi and local body tax from July 1. The MVT is levied at the time of purchase of the vehicle.
The state government hopes to add ₹700 crore to its kitty from the new tax. The decision to increase the tax was taken at the state Cabinet meeting on Monday.
A press statement issued by the Chief Minister’s Office said that for two- and three-wheelers the MVT, which is between 8 to 10, will increase to 10 to 12 per cent. The tax on petrol vehicles will increase from 9 to 11 per cent to 11 to 13 per cent, the statement said.
For diesel vehicles, the tax, which is currently from 11 to 13 per cent, will increase to 13 to 15 per cent. On CNG and LPG vehicles, the tax will increase from 5 to 7 per cent to 7 to 9 per cent.