- This scheme aims to boost EV adoption in the state.
- Hybrid vehicles are not included in this scheme.
- To avail benefits, EV buyers must register their vehicles on the Vahan portal.
The government of Gujarat has slashed the road tax on electric vehicles (EVs) from the earlier 6% to just 1%, valid till March 31, 2026. That’s a big drop of over 83%. This move is aimed at encouraging more people to switch to cleaner mobility solutions. To claim the rebate, EV owners must be registered through the Vahan Portal.
According to officials, the savings on an electric 2-wheeler could range from Rs 5,000 to Rs 10,000, depending on the model and cost of the vehicle. However, the savings are even more substantial in the case of four-wheelers. For example, the Tata Nexon EV’s Empowered+ LR variant costs Rs 16.99 lakh (ex-showroom) in Ahmedabad. With the revised RTO tax rate, it will now attract an RTO tax of just Rs 16,990, down from the earlier Rs 1,01,940. That’s a huge saving of Rs 84,950.
To avail the tax benefits, buyers must register their 4-wheeler on the Vahan 4.0 portal. However, it is worth noting that hybrid vehicles (both strong and mild) are not covered in this scheme.
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Why did the government reduce the road tax?
The sales of electric vehicles in Gujarat have taken a significant hit last year, falling by 43.5% – from 88,614 units in 2023 to just 50,000 in 2024. Official suggests this drop was largely due to the withdrawal of subsidies in 2023, which earlier offered Rs 25,000 for electric 2-wheelers and up to Rs 1.5 lakh for 4-wheelers priced under Rs 15 lakh. So, to address the slowdown and encourage EV adoption once again, the government has introduced this new incentive to buyers.