Thiruvananthapuram, 28 June (H.S.):The Kerala government has incorporated the changes announced in the State Budget regarding road tax for electric vehicles (EVs) into the draft Finance Bill, offering tax relief for affordable EVs while increasing the levy on luxury models.

Under the proposed tax structure, electric motorcycles, auto-rickshaws, cars and private service vehicles priced up to ₹10 lakh will attract a road tax of 3%, down from the existing 5%. The reduction is expected to make electric vehicles more affordable and encourage wider adoption of clean mobility.

Electric vehicles priced between ₹10 lakh and ₹20 lakh will be taxed at 5%, while those costing between ₹20 lakh and ₹40 lakh will continue to attract a road tax of 10%.

However, the government has proposed a higher tax for premium electric vehicles. EVs priced above ₹40 lakh will now be subject to a 15% road tax, compared to the existing rate of 10%, marking a five-percentage-point increase.

The revised tax rates will apply only to electric vehicles registered for private use. Commercial electric vehicles are not covered under the new provisions.

The government has said the revised tax structure is aimed at promoting the adoption of affordable electric vehicles while ensuring that higher-end luxury models contribute more in taxes. The move is expected to support Kerala's transition towards sustainable transportation without compromising revenue from the premium EV segment.

The proposed changes will take effect after the draft Finance Bill is passed by the State Assembly.

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Hindusthan Samachar / Arun Lakshman