Maharashtra hikes tax on polluting vehicles to curb air pollution, boost green mobility

Mumbai: The Maharashtra Legislative Assembly on Wednesday unanimously passed an amendment Bill that seeks to curb rising air pollution by increasing environmental tax on old and polluting vehicles.

The Maharashtra Motor Vehicles Tax (Amendment) Bill, 2026, was aimed at balancing environmental protection, fiscal discipline and industrial growth, Transport Minister Pratap Sarnaik said.

It seeks to curb rising air pollution by increasing environmental tax on old and polluting vehicles, he told the House.


Under the revised structure, environmental tax on two-wheelers has been increased from Rs 2,000 to Rs 4,000, on petrol vehicles (light motor) from Rs 3,000 to Rs 6,000, and on diesel ones (light motor) from Rs 3,500 to Rs 7,000. The tax will be collected as a one-time payment for a period of five years.

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The minister informed the House the new tax regime for vehicles is expected to generate over Rs 160 crore in additional annual revenue for the state, which will be utilised for road safety measures, modern transport infrastructure, automatic testing system and training.

Providing relief to the industrial sector, the bill caps motor tax on crane vehicles at Rs 30 lakh, a move that is expected to boost investment in construction and infrastructure.

Measures in the bill will encourage adoption of BS-VI (India's strictest vehicle emission standards) and promote electric vehicles, strengthening the state's environmental policy and potentially generating employment in rural and tribal areas, Sarnaik noted.

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He added that the bill will not impose any additional burden on the state's consolidated fund and will instead aid revenue growth.

Members from across parties supported the legislation, leading to its unanimous passage in the Lower House.