Premium electric vehicles to cost more in Karnataka, govt levies additional tax

  • The Karnataka government hopes the state to register 23 lakh electric vehicles by 2030, despite the tax growth.
Kia EV6
The Karnataka government hopes the state to register 23 lakh electric vehicles by 2030, despite the tax growth.
Kia EV6
The Karnataka government hopes the state to register 23 lakh electric vehicles by 2030, despite the tax growth.

High-end electric vehicles to be costlier in Karnataka, as the state government has levied additional tax on them. The latest move from the Karnataka government comes amidst the pressing environmental concerns, which may affect the growth of electric vehicles in the state. The amended Karnataka Motor Vehicle Taxation Act 2024 imposes a 10 per cent lifetime tax on the high-end electric vehicles in the state, which come over and above the current road taxes.

Now, according to the amendment made to the Karnataka Motor Vehicle Taxation Act 2024, electric vehicles that cost over 25 lakh, will be slapped with a lifetime tax of 10 per cent of the vehicle's cost during the registration of a new vehicle. "Motor cars, jeeps, omnibuses, and private service vehicles running on electricity, with a vehicle cost exceeding INR 25 lakh, will be subject to a lifetime tax of 10 per cent of the vehicle's cost at the time of registration of a new vehicle," the notification reads.

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Even prior to the amendment, Karnataka imposed one of the highest road taxes on vehicles in India, ranging between 13 per cent and 20 per cent. Imposing a 10 per cent additional tax on premium and luxury electric vehicles will further increase the pricing of premium high-end electric vehicles. Interestingly, this comes after the Karnataka government exempted pure electric vehicles from paying road taxes in the state. However, while Karnataka offers road tax exemption with zero registration fees for electric vehicles, other states provide financial subsidies through their respective EV policies.

This move is posed to impact sales of electric cars, SUVs and commercial vehicles in the state. However, the state government is looking to bolster the revenue and regulate the burgeoning electric vehicle market through the amended policy. Also, despite the imposition of a 10 per cent lifetime tax, the Karnataka government foresees a substantial rise in EV sales in the coming years. The state government anticipates approximately 23 lakh electric vehicles to be sold in Karnataka by 2030, which would register a considerable growth from the current 80,000 units. In Karnataka, the number of electric vehicles has already surpassed three lakh units.

First Published Date: 11 Mar 2024, 09:31 AM IST
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