Gujarat cuts tax on electric vehicles to 1 pc till 2026 to promote green mobility

Ahmedabad, April 18 (IANS) The Gujarat government has announced a significant tax relief on electric vehicles (EVs). Minister of State for Home and Transport, Harsh Sanghavi, declared that the state will offer a 5 per cent tax exemption on fully electric vehicles until March 31, 2026.

With this move, the effective tax rate on EVs will come down to just 1 per cent, making them considerably more affordable for citizens.

Announcing the initiative, Sanghavi emphasised the state’s vision of a greener, cleaner Gujarat. “This is a citizen-centric step towards eco-friendly transportation. It reflects our firm resolve to reduce pollution and promote sustainable alternatives,” he stated.

The decision is expected to accelerate the adoption of electric vehicles across Gujarat by reducing the financial burden on buyers. Citizens can now avail the benefit directly by registering their EVs online through the Vahan 4.0 portal, simplifying the process and ensuring transparency.

This tax relief is part of the broader green mobility strategy adopted by the Gujarat government, aimed at reducing carbon emissions, improving air quality, and promoting long-term environmental sustainability. Gujarat has taken a bold leap towards becoming a leader in electric mobility with the launch of its Electric Vehicle Policy 2021.

With a substantial budget allocation of Rs 870 crore, the state aims to drive large-scale adoption of electric vehicles and position itself as a major hub for EV manufacturing.

The policy, which is in effect until 2025, sets ambitious targets -- including the deployment of 2 lakh electric vehicles across the state. This includes 1.10 lakh two-wheelers, 70,000 three-wheelers, and 20,000 four-wheelers. The environmental goals are equally impactful, with the policy projected to reduce carbon emissions by approximately 6 lakh tonnes and save fuel expenses worth Rs 5 crore during its duration. On the infrastructure front, Gujarat is focused on building a robust EV ecosystem.

The government is promoting the development of charging stations by offering subsidised electricity tariffs and incentives to private players.

In addition, major investments are being encouraged in the EV supply chain, including the establishment of lithium-ion battery manufacturing units. One such major facility worth Rs 7,300 crore is under development in Ahmedabad. The results of these efforts are already visible. As of April 2025, Gujarat has registered over 2.64 lakh electric vehicles and deployed more than 800 electric buses across the state.

--IANS

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