Despite opposition, Karnataka plans to push ahead with electric vehicle tax

Bengaluru: Despite strong opposition, the transport department will proceed with the collection of lifetime tax on all variants of electric cars. Officials said technical changes are being made to the Vahan portal to enable tax collection, and the rollout is likely within the next 15 days.Under the Karnataka Motor Vehicles Taxation (Amendment) Act, 2026, electric vehicles will attract a lifetime road tax at the time of registration, ranging from 5% to 10% of the vehicle cost depending on price slabs. Electric cars priced up to Rs 10 lakh will be taxed at 5%, those between Rs 10 lakh and Rs 25 lakh at 8%, and vehicles costing above Rs 25 lakh will attract 10%.The state govt expects to generate around Rs 249 crore in revenue from this move. Since 2016, Karnataka has offered lifetime tax exemption to promote green mobility. However, in 2024, cars priced above Rs 25 lakh were brought under the tax net with a 10% levy. The latest proposal expands the tax to cover all electric car segments.The move has drawn criticism from the opposition, with BJP calling the move a regressive step that could slow EV adoption.Bangalore South MP Tejasvi Surya, in a letter to the chief minister, said the policy runs counter to the broader national goal of accelerating electric mobility. He warned that instead of encouraging adoption, the tax could discourage consumers and affect the growth of the EV ecosystem. He also pointed to central initiatives such as FAME India and PM E-Drive aimed at boosting EV adoption."Rather than incentivising adoption, it risks discouraging consumers and slowing the growth of the EV ecosystem in the state," he said, adding that govts like Delhi are promoting EV adoption by offering full road tax waivers for electric cars costing below Rs 30 lakh, while Karnataka appears to be moving in the opposite direction to increase revenue.Electric car manufacturers have also raised concerns over the proposal and urged the govt to roll back the decision, warning that it could impact demand and slow down the transition to cleaner mobility.
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