Octroi Abolished in Maharashtra | Road Tax Hiked by 2%

Maharashtra witnessed a 2% hike in one time road tax on registration of private cars and 2-wheelers in the state. The move came right after the implementation of GST and end of state level octroi in 22 Indian states.

Government shows a loss of INR 700 Crore every year with the end of octroi. This will recover through this increase in the road tax, taking the value to 11-13% for petrol and 13-15% for diesel cars. The change depends on cost of vehicle as the old values were 9-11% for petrol and 11-13% for diesel cars.

The registration cost for motorcycles now fall between 10-12%, leaving behind the 8-10% slab that was applicable till June 30, 2017. The increased tax will also count the recently introduced 2% road safety cess from the customers.

Octroi Abolished in Maharashtra | Road Tax Hiked by 2%

The annual revenue after this increase in the road tax will count around INR 750 Crore, compensating the loss that came after end of octroi. Prices of all cars and 2-wheelers witnessed a huge change in most pars of India. Cars that fall above 4 meter in length and have bigger engines than 1.5 liter saw the biggest change.

About INR 1 lakh gets reduced on every 12 lakh that is used for buying a sports utility vehicle in India. The same was even seen on luxury cars as prices of all BMW, Audi and Mercedes cars saw a steep decline after GST.

The state cabinet has even decided to cap the road tax at INR 20 lakh, keeping people away from registering cars in the nearby UT’s. Maharashtra has a huge share in sales of luxury cars and benefits passed would help many realize their dream of owning a car that falls one segment above their present car.

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