Telangana replaces road tax exemption for electric cars with high rates.

In light of Telangana’s concerted efforts to position itself as a premier hub for the burgeoning e-mobility sector, a significant policy change has been introduced where the previously granted road tax exemption for electric cars has been substituted with a levy ranging from 11% to 15%, a move that could catch potential electric vehicle (EV) buyers off guard.

Thank you for reading this post, don't forget to subscribe!

Gaurav Gupta, Deputy Managing Director of MG Motor India, revealed that the state’s policy shift entails a shift from the earlier zero road tax to a newly implemented life tax, based on the price points of electric cars. Road tax, also referred to as life tax, is a fee imposed by the transport department at the time of vehicle registration.

While official representatives from the government remained silent on the matter, industry insiders verified the imposition of this new tax. Interestingly, this decision has been made amidst the government’s intensified efforts to position Telangana as the preferred destination for the emerging e-mobility sector.

Although the introduction of this tax wasn’t entirely unexpected due to the state government’s earlier imposition of a cap on the number of electric cars eligible for exemption, the move has the potential to sway those considering electric vehicle purchases, as tax incentives and cost advantages compared to traditional fuel-powered vehicles were significant factors driving their preference.

Starting from June, the road tax rates for electric cars were put into effect, according to a showroom manager from a prominent car manufacturer. Once vehicle details are entered into the Regional Transport Authority (RTA) portal for registration, the system automatically calculates the applicable life tax.

The newly introduced road tax for electric cars is set at 11% for vehicles priced below ₹10 lakh ex-showroom, 14% for those priced between ₹10-20 lakh, and 15% for cars above ₹20 lakh. An additional 2% levy is imposed if the person has an existing car registered in their name or if the buyer is an organization.

Gaurav Gupta, who recently attended the inauguration of three MG Motor touchpoints in Hyderabad, expressed hope that the government would reconsider this policy change. He pointed out that such a tax might adversely impact the momentum of the e-mobility sector and suggested that a recalibration of the policy might be necessary.

He emphasized that the state has shown promising acceptance of electric vehicles and added that Andhra Pradesh is another southern state that recently initiated road tax for electric cars. Among the states that continue to offer road tax exemption for electric cars are Tamil Nadu, Kerala, Karnataka, Punjab, Uttar Pradesh, and the National Capital Region.

In a directive issued in February 2021, the Telangana government had granted exemption from road tax and registration fees for 5,000 electric cars deployed as taxis and tourist cabs, as well as an equal number of private electric cars. For electric two-wheelers, a cap of 2 lakh units was established for the exemption, which, according to industry sources, remains a significant target to achieve.

Leave a Comment

Your email address will not be published. Required fields are marked *

Amazon India Today's Deals

Scroll to Top