It has been decided to provide tax relief for imported and company owned vehicles by imposing a cap of 20%.

As per The Times of India report: In a major relief for consumers, the state cabinet on May 16, 2012 decided to limit the tax rate on imported and company owned vehicles to 20%.

Following a decision to hike tax on petrol and diesel cars by 2% and 4%, respectively, the tax rate on the purchase of imported and company-owned vehicles-which are charged at a higher rate-had increased considerably.

While a tax of 22% was being levied on imported petrol-run cars, the rate was 26% for diesel cars. The hike in rates led to a trend wherein such cars were registered in neighbouring states such as Gujarat, where the tax rates were low.

To reverse the trend and prevent a further loss of revenue, the cabinet decided to impose a cap of 20% that could be imposed on such vehicles. The cabinet also decided to apply a decision to lower tax rates for CNG and LPG cars for import of vehicles purchased in some other state.

An ordinance in this regard will soon be issued. State transport department officials are hoping that the decisions will help boost the sales of vehicles in Maharashtra.