India’s state of Maharashtra withdraws proposed 6% sales tax on high-end electric vehicles

Investing.com -- Maharashtra, one of India’s states, has retracted its proposal to impose a 6% sales tax on electric vehicles (EVs) priced over $35,000. This move aims to boost the adoption of EVs in a market where sales are still in their infancy. India is currently the third-largest auto market globally.

The chief minister of Maharashtra, Devendra Fadnavis, confirmed the reversal of the proposed tax during a state assembly session on Wednesday. He indicated that the tax was disincentivizing the luxury EV segment without a valid reason, hence the decision to withdraw it.

Maharashtra, the western state that houses Mumbai, India’s financial hub, already has established EV manufacturers such as Mahindra and Tata. The state has also attracted investment for new factories, including those for EVs, from Hyundai Motor (OTC:HYMTF) and Toyota Motor (NYSE:TM).

According to Fadnavis, these new manufacturing facilities will enable Maharashtra to become the national capital of electric vehicles in India.

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