Gujarat Slashes EV Tax to Just 1% to Boost Sales Until March 2026

Ahmedabad, April 18 — In a major policy move aimed at accelerating the adoption of electric vehicles (EVs), the Gujarat government has officially reduced the tax on EVs from 6% to just 1%. The tax cut will remain in effect until March 31, 2026, providing a strong financial incentive for consumers to switch to cleaner transportation.

Massive Tax Relief on Electric Vehicles in Gujarat

The 5% tax cut applies to all categories of electric vehicles, including two-wheelers and four-wheelers. This means car buyers in Gujarat can now save between ₹30,000 and ₹1 lakh on their purchases, while two-wheeler buyers also benefit significantly from the reduced tax rate. The announcement was confirmed by Gujarat Minister of State for Transport, Harsh Sanghavi, via a post on X (formerly Twitter).

Consumers can register their EVs through the government’s official Vehicle 4.0 portal to avail themselves of this benefit seamlessly.

Policy Rollout Follows Subsidy Withdrawal

Previously, Gujarat led the way in EV adoption by offering subsidies—₹25,000 on electric two-wheelers and up to ₹1.5 lakh on electric cars priced below ₹15 lakh. However, these subsidies were withdrawn last year, leading to a 50% decline in EV sales across the state, especially in Surat, which had been a leading district in EV adoption.

The newly announced tax reduction is seen as a corrective step to revive demand in the sector and reinforce Gujarat’s commitment to clean mobility.

Positive Impact Expected on EV Market

With the implementation of this tax relief, the government aims to bring down the overall cost of EV ownership and encourage more people to switch to electric. This decision is expected to revive EV sales and support the state’s larger environmental goals. Industry experts believe this move could significantly impact the EV ecosystem, especially in urban areas where the demand for economical and eco-friendly transport solutions is on the rise.