The federal government, in the Budget 2026-27, has announced a series of new and increased duties on imported and luxury vehicles, including SUVs above 2,000cc and high-end electric vehicles, according to the budget speech.
The move is aimed at curbing luxury imports, increasing tax revenue, and discouraging consumption of high-emission and non-essential vehicles.
Under the new budget measures, the government has imposed increased taxes on imported SUVs with engine capacities ranging from 2,000cc to 3,000cc, while duties on vehicles above 3,000cc have also been raised further.
Officials said the step is part of efforts to rationalize the automobile sector and reduce pressure on foreign exchange reserves caused by luxury imports.
Luxury electric vehicles also taxed
In a notable move, the budget also introduces taxation on luxury electric vehicles priced above Rs 2 crore, marking a shift in policy as even high-end EVs are brought under the tax net.
The decision is expected to impact premium automobile imports in the country, particularly high-end international brands targeting wealthy buyers.
Separately, the government has imposed an excise duty of Rs 80 per litre on white spirit and mineral turpentine oil, substances commonly used in fuel adulteration.
According to the budget speech, the measure aims to curb illegal fuel mixing practices that damage vehicles and machinery of consumers across the country.
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