Maharashtra Tax Hike Hits Auto Sector, CNG and EV Shares Decline

The Maharashtra government's recent budget announcement, which includes a 1% increase in tax on CNG vehicles and a 6% additional tax on electric vehicles priced above Rs 30 lakh, has negatively impacted the automotive sector. The tax hikes, aimed at generating additional revenue for the state, led to a decline in shares of major automakers and Mahanagar Gas (MGL). Specifically, Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Hyundai Motors, and Bajaj Auto all experienced share price drops following the budget announcement.

, which supplies CNG, also saw its shares decline. The proposed tax changes, effective from April 1, 2026, are projected to generate significant revenue for the state. The budget also introduced a 7% motor vehicle tax on construction and light goods vehicles. Despite Maharashtra's strong EV registration numbers, the new tax on high-end EVs has raised concerns within the automotive industry. The Nifty Auto index closed significantly lower, reflecting the market's reaction to the tax increases.