The Kerala government has announced significant revisions in road tax rates for electric vehicles (EVs) in the state budget presented on Friday, introducing a price-based tax structure aimed at promoting the adoption of affordable EVs while increasing revenue from luxury models.
Revised Tax Rates for Different Price Brackets
Under the revised rates, electric vehicles priced up to Rs 10 lakh will attract a road tax of 3%, down from the existing 5%. The government expects this cost reduction to make EVs more accessible to ordinary families and middle-class consumers.
Electric vehicles priced between Rs 15 lakh and Rs 20 lakh will also benefit from a tax cut, with the rate being reduced from 8% to 5%. For electric vehicles costing between Rs 20 lakh and Rs 40 lakh, the existing road tax rate of 10% will remain unchanged.
Luxury EV Segment Sees Tax Hike
However, luxury electric vehicles priced above Rs 40 lakh will now attract a higher tax rate of 15%, up from the current 10%. This move is designed to generate additional revenue from premium models while keeping affordable EVs within reach of the common man.
Government's Rationale
The government stated that the revised tax structure is intended to encourage the use of lower-priced electric vehicles by offering tax concessions, while generating additional revenue through higher levies on premium and luxury models. This approach aims to balance environmental goals with fiscal prudence.
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