Starting July 1, 2025, the Maharashtra government made a big change to its vehicle registration policy. The one-time tax limit has increased from ₹20 lakh to ₹30 lakh. This change will significantly affect buyers of high-end passenger vehicles and commercial goods carriers.
What’s Changed
Under the updated structure, the taxable value for registration tax, calculated as a percentage of a vehicle’s ex-showroom price, is now capped at ₹30 lakh instead of ₹20 lakh. This change means cars priced above ₹20 lakh will now be taxed on a larger portion of their value, up to the new ₹30 lakh limit.
Real‑World Cost Implications
Consider a Toyota Fortuner Legender with an ex-showroom price of about ₹45 lakh in Mumbai. Previously, the one-time tax applied only to amounts up to ₹20 lakh. Now that the cap has been raised, an additional ₹10 lakh is taxable. At a 5% tax rate, this change could result in ₹50,000 more in registration fees.
Luxury vehicles like the BMW X5, Mercedes-Benz GLC, and Audi Q5, which are usually priced above ₹60 lakh, might see total tax increases between ₹50,000 and ₹1 lakh. This will depend on the slab and variant.
Impact On Commercial Vehicles
The policy change also affects commercial vehicles, particularly high-value vans, trucks, and light commercial vehicles (LCVs). For fleet operators and logistics companies, the higher registration cost may lead to price increases, delayed vehicle replacements, or tighter budgets. This could ultimately result in higher freight and service charges for end consumers.
Industry Perspectives
Auto dealerships are concerned about a possible decline in sales of high-end vehicles. Buyers are now considering the tax hike as an extra cost, similar to optional features or insurance add-ons. This is leading some to postpone or downgrade their purchases. Commercial groups say that this change may put pressure on small and mid-size businesses that are already dealing with fuel and compliance costs.
Balancing Revenue And Affordability
From a governance viewpoint, the revision is expected to raise state revenue from the luxury and commercial segments. This move aligns with a wider strategy of progressive taxation, where high-value assets face more financial responsibility. However, as EV adoption grows and the premium segment gradually recovers after the pandemic, the timing of this policy change may reduce buyer enthusiasm.
