Karnataka to introduce extra cess on new transport vehicles and lifetime tax on luxury EVs

This move comes as the Karnataka Motor Vehicle Taxation (Amendment) Act, 2024, received approval from Governor Thaawarchand Gehlot on March 6, and was officially announced in the gazette on March 7.

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The new regulation also specifies that electric motor cars, jeeps, omnibuses, and private service vehicles priced above ₹25 lakh will incur a lifetime tax. This tax, calculated as 10% of the vehicle's cost, will be applied at the time of a new vehicle's registration.

Back in March 2016, the Karnataka government introduced a policy exempting all electric vehicles (EVs) from road tax payments. While Karnataka provides an exemption from road tax and waives registration fees for EV purchases, other states have opted to offer financial incentives to promote the adoption of EVs.

Karnataka currently has some of the highest road tax rates in India, with figures between 13% and 20%.