Karnataka Hikes Lifetime Tax on Commercial Vehicles from May 1
Starting May 1, the Karnataka government will implement the amended Karnataka Motor Vehicle Taxation Act, increasing lifetime registration taxes for commercial vehicles, despite opposition from operators.
Under the revised law, vehicles priced under ₹10 lakh—mostly taxis—will face a one-time lifetime tax of 5% of their purchase value, translating to about ₹50,000. Previously, such vehicles paid quarterly taxes amounting to around ₹1,800 per year.
Vehicles priced between ₹10–15 lakh will now attract a 9% lifetime tax, while those above ₹15 lakh must pay 15% at the time of registration. Electric vehicles (EVs) over ₹25 lakh, earlier exempt from road tax, will now incur a 10% tax, a move critics say will hamper EV adoption in the commercial sector.
“The sudden hike is a major burden,” said K Radhakrishna Holla, President of the Karnataka State Travel Operators’ Association. He warned that the tax increase could deter small operators and slow down the transition to electric mobility.
Additionally, commercial vehicles used in the construction sector, including those equipped with air compressors and generators, will be taxed at 8% of their cost.
The Transport Department is aiming for a revenue collection target of ₹15,000 crore for FY 2025–26, partly through this new taxation framework.
Industry stakeholders argue that the steep upfront costs could impact small business owners and taxi operators severely, calling for phased implementation or reconsideration.
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