Maharashtra Proposes Double Green Tax, Scrappage Incentives For Old Vehicles

The Government of Maharashtra has proposed measures to encourage vehicle owners to retire older vehicles from the road. The proposal includes higher green taxes on ageing vehicles along with tax concessions for owners who voluntarily choose to scrap them and purchase newer models.

Also Read: No More KYV: Relief for FASTag Users from February 2026

Under the proposed plan, vehicle owners who scrap older vehicles could receive motor vehicle tax concessions when buying a replacement. Owners scrapping BS-III or older vehicles may receive a 30 per cent concession on motor vehicle tax, while those scrapping BS-IV vehicles could be eligible for a 16 per cent concession when purchasing a new vehicle. The move is intended to encourage the replacement of older vehicles with newer models that comply with stricter emission norms.

Alongside the incentives, the state government has also proposed a revision of the green tax applicable to older vehicles. As per the proposal, the environmental tax could be doubled. If implemented, the green tax for two-wheelers may increase from Rs 2,000 to Rs 4,000, while petrol cars could see it rise from Rs 3,000 to Rs 6,000. For diesel cars, the tax could increase from Rs 3,500 to Rs 7,000. These taxes are typically collected at the time of vehicle registration renewal once a vehicle crosses a certain age threshold.

Also Read: No Fastag Annual Pass For Three Row Cars? NHAI Clarifies

The proposal is aligned with the broader framework of the Vehicle Scrappage Policy introduced by the central government. Under this system, vehicles scrapped at authorised Registered Vehicle Scrapping Facilities (RVSFs) are issued a certificate of deposit, which can then be used to claim benefits when purchasing a new vehicle.

The state government’s proposal aims to encourage owners to phase out older, higher-emission vehicles. The measures are currently under consideration, and details on implementation timelines are expected to be clarified as the proposal progresses.