Karnataka raises vehicle registration fees; Introduces lifetime tax for electric cars

The Karnataka government has given the green light to a new law that will make registering vehicles in the state more expensive.

This law, officially published in the gazette on March 7, introduces a 3 percent surcharge on transport vehicles, with the proceeds directed to the Karnataka Motor Transport and Other Allied Workers Social Security and Welfare Fund.

Moreover, the state government now possesses the authority to impose a lifetime tax on electric vehicles. Electric cars, jeeps, omnibuses, or private service vehicles exceeding 25 lakh rupees in value will incur a 10 percent tax at the time of registration.

This marks the first instance of such a tax being implemented on electric vehicles in Karnataka.

Lifetime tax on EVs above Rs 25 lakh

The taxation amendment also empowers the state government to impose a lifetime tax on electric vehicles (EVs). "Motor cars, jeeps, omnibuses, and private service vehicles running on electricity, with a vehicle cost exceeding Rs 25 lakh, will be subject to a lifetime tax of 10% of the vehicle's cost at the time of registration of a new vehicle," it states.

In March 2016, the Karnataka government exempted all EVs from paying road taxes. However, while Karnataka offers road tax exemption with zero registration fees for EV buyers, other states provide financial subsidies to encourage EVs.