KEY HIGHLIGHTS
- Gujarat slashed road tax on EVs
- Now down to 1% from the earlier 6%; Drop of 5%
- Applicable only on pure EVs and not hybrid vehicles
Electric vehicles are slowly gaining popularity, but it still looks like a long road when the EVs in the family car segment pick up pace and to cater to this roadblock, governments are offering various incentives to buyers for making this shift. Now, the Gujarat government has slashed the EV tax by 5%, and the buyers will now have to pay just 1% road tax for their EVs. Read on as we lay out the time frame and other conditions of the limited-period offer, but before that, make sure to join the 91wheels WhatsApp Community to never miss out on any latest news and automotive updates.
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EVs Get Cheaper In Gujarat As EV Tax Down To 1%
The Gujarat government has rolled out a major tax relief for electric vehicle buyers, slashing the road tax from 6% to just 1%. Announced in the 2025-26 state budget and effective from April 18, 2025, this move aims to make EVs more accessible and boost adoption. However, the reduced tax rate is only valid until March 31, 2026, and does not apply to hybrid vehicles. This is a move that stemmed from thedwindling sales of the EVs in the state.
The government announced the road tax reduction on EVs as a strategic step to revive sales and support environmental sustainability. EV sales in the state saw a sharp 43% drop, from 88,614 units in 2023 to just 50,010 in 2024. A key factor behind this decline was the discontinuation of substantial subsidies, including rebates of up to Rs 1.5 lakh for electric cars priced below Rs 15 lakh, which previously boosted affordability and demand.
EV Tax Cut: How To Avail The Tax Benefits
To claim the reduced EV road tax in Gujarat, buyers must register their electric vehicles via the Vahan 4.0 portal. This online process eliminates the need for a physical RTO visit and ensures the 1% tax rate is applied. However, the scheme is limited strictly to fully electric vehicles, those with hybrid powertrains, whether mild or strong, are not eligible for this benefit. As for the two-wheelers, the benefit will range in the price bracket of Rs. 5,000 to Rs. 10,000.
Verdict
The reduction of road tax will help Gujarat government to offer that necessary EV push that will incentivise the buyers to make the sustainable transition. However, with a deadline for the rebate untile March next year, authorities will likely monitor he situation and may extend the benefits further to keep the momentum going.
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