The Haryana government’s new tax exemption policy aimed at promoting electric vehicles came into force on Tuesday.Haryana offers a 100% motor vehicle (road) tax exemption on new battery electric vehicles (BEVs) with an ex-showroom price of up to Rs 30 lakh.For electric vehicles priced above Rs 30 lakh, the state provides a 50% tax exemption. These benefits apply to two-, three-, and four-wheelers registered within the state. The existing 20% motor vehicle tax exemption for CNG vehicles remains unchanged.Exemption applicable on EVs bought, registered in HaryanaThe new tax exemption policy came into effect on August 21. With this, the new system for registration of electric vehicles became operational across the state. Under the new system, the first electric vehicle was registered in the Gurugram and Badshahpur sub-divisions of Gurugram district.Badshahpur SDM Sanjeev Singla said that the benefit of the tax exemption scheme will be applicable only to buyers whose electric vehicles are purchased and registered in Haryana. Electric vehicles purchased from other states will not be eligible for the motor vehicle tax exemption under this scheme.Why did Haryana waive EV road tax?The decision to drastically cut registration costs serves two primary purposes for the state:Combating revenue drain: Previously, dealerships in Haryana were losing sales and the state was losing revenue because buyers preferred to register their cars in neighboring Delhi and Chandigarh, where EV registration charges were already zero.Environmental friendly: The tax exemption is intended to reduce vehicular emissions, lower overall pollution levels, and significantly improve the state’s air quality by driving the adoption of clean transportation.Does EV subsidy affect actual price?Removing the road tax entirely reduces the large upfront amount buyers usually have to pay during registration. This effectively narrows the on-road price gap between electric vehicles and standard market alternatives.According to the registration receipt issued by the Transport Department, Gurugram resident Vikrant submitted an application for registration of a Mahindra BE Formula EV car. Under the new system, the motor vehicle tax of Rs 2, 44,900, otherwise, payable on the vehicle, was completely waived off. Similarly, Rashil Goyal, a resident of Badshahpur sub-division, submitted an application for registration of a Tata Tiago EV. Under the new tax exemption policy, he received a direct benefit of Rs 81,120.Gurugram Deputy Commissioner Uttam Singh said the category of EV vehicles getting total tax exemption included the electric scooters, autos, e-rickshaws and various types of electric four-wheelers.“For electric vehicles with an ex-showroom price of more than Rs 30 lakh, a 50 per cent exemption from motor vehicle tax has been provided,” he said.