Maharashtra to mandate GST checks before vehicle registration to curb tax evasion

The Maharashtra government is framing a new policy that will make Goods and Services Tax (GST) verification mandatory before any vehicle registration in the state. The decision, which was discussed during a legislative session in Mumbai on Tuesday, July 7, 2026, is aimed at curbing tax evasion by luxury car buyers.

Under the proposed rules, vehicle owners must undergo GST verification before they can complete their vehicle registration. This measure is designed to ensure that luxury cars and other vehicles purchased within Maharashtra are registered within the state itself, rather than in other states that offer lower tax rates.

The policy initiative was prompted by discussions during the Question Hour in the Maharashtra Legislative Assembly. Congress legislator Vijay Wadettiwar officially raised the issue in the house, pointing out that a significant number of luxury cars are purchased and used in Maharashtra but registered outside the state specifically to avoid paying higher local taxes.

By registering these high-end vehicles in jurisdictions with lower tax structures, buyers have been evading the higher taxes imposed by Maharashtra. This practice has resulted in substantial revenue losses for the state government.

To prevent this ongoing loss of revenue, the government's new policy will establish a strict link between vehicle purchase and registration through the mandatory GST verification process. Once implemented, the rules will require proof of GST compliance within the state before registration can be completed.

This administrative change aims to close the existing loopholes that allow buyers to exploit tax differences between states. The state government expects the mandatory verification to secure its rightful tax revenue from all luxury vehicle sales made within Maharashtra. The proposed policy represents a major step by the state to tighten luxury car registration rules and protect public revenue.