The state government of Gujarat has reduced the road tax on all new electric vehicles (EVs) from 18 April 2025 to 31 March 2026 to bring incentives for increasing sales of EVs and the consistent development of clean mobility.
The tax credit is a complete five percent reduction from the previous tax benefit. It now stands at a mere 1 percent road tax from the previously charged 6 percent under the scheme. Indeed, these savings will attract potential buyers of EVs into action now.
Reason Behind Gujarat's EV Tax Cuts
This 5% road tax incentive was mooted in the Gujarat state budget for fiscal 2025-2026. Finance Minister Shri Kanubhai Desai cited urgency in the adoption of EVs on environmental grounds as the major argument in favor of the measure.
Interestingly, EV sales in Gujarat did take a deep plunge in 2024, down 43% compared to the previous year. The numbers nose-dived from 88,614 in 2023 to 50,010 in 2024.
The downturn in sales can largely be attributed to the withdrawal of the previous state EV subsidies, which had offered buyers incentives of up to ₹1.5 lakh on four-wheelers that cost less than ₹15 lakh.
What This Means for EV Buyers
The new road tax cut applies to all EVs irrespective of their price, but the actual gain differs. For example, ₹15 lakh MG Windsor EV buyers had an earlier subsidy of ₹1.5 lakh. Now same buyers will only save ₹45,000- this is much lower. But those buying higher-end EVs over ₹15 lakh would profit even more under the current tax rebates, since they were earlier excluded from subsidies.
Who Can Avail and How
The procedure for availing this scheme has to be completed while registering the new EV by customers through the Vahan 4.0 Portal. The online registration streamlines the procedure as there is no manual intervention to visit the RTO. Please note that this incentive is only for pure EVs; hence, hybrids are excluded.
With this move, Gujarat might be able to propel its automotive market towards greener horizons and may just provide the push required to get a lot more electric cars on-road.
Also Read: