With the provisions of the Kerala Finance Bill, 2026, coming into force "at once", low and mid-segment electric vehicles will cost less and the operational costs of private buses, possibly hit by the free KSRTC bus rides for women, will also drop.

The Finance Bill, 2026, was passed in the Assembly on Wednesday in the absence of the LDF  members who had boycotted the proceedings, citing the inclusion of low-alcohol liquor rates in the Bill. 

Section 3 of the Bill fixes a sales tax rate of 120 per cent for low-alcohol beverage with 0.5-10 per cent alcohol, and 175 per cent for beverage with 10-20 per cent alcohol content. Tax proposals mooted in the Revised Budget have found a place in the Finance Bill. 

Nonetheless, unlike in the case of the road tax of electric vehicles, the liquor tax rates will not become operational soon. "It will come into force on such date as the government may, by notification in the Official Gazette, appoint," the Bill says. 

Chief Minister V D Satheesan reiterated that the rates would become operational only if the UDF grants its approval. He also dismissed the Opposition concern that the rates would automatically come into force once they have been included in the Finance Bill. "The Beverages Corporation has a monopoly in the wholesale of liquor in Kerala. No liquor can be sold without BEVCO's approval," the CM said.  

On the other hand, the road tax proposal will kick in "at once". 

The road tax on electric vehicles priced up to ₹10 lakh has been reduced from the current 5% to 3%. Road tax on electric vehicles priced between ₹15 lakh and ₹20 lakh has been reduced to 8% from 5%. The policy measure is expected to encourage the shift to non-polluting travel. 

The road tax on EVs priced between ₹20 and ₹40 lakh will remain unchanged at 10 per cent. However, the road tax on EVs in the costlier bracket of above ₹40 lakh will increase from 10 to 15 per cent.

Offering a breather to the public transport operated in the private sector, the quarterly tax of stage carrier buses has been slashed by 50 per cent.  

The quarterly tax rates of all India tourist permit (AITP) buses have been cut by more than half. The existing quarterly rate of ₹2,000 per seat will come down to ₹900, and the current rate of ₹3,000 per sleeper will be softened to ₹1,500. The objective is to encourage more all India tourist permit buses to register in Kerala and to increase inter-state travel facilities.

Tax slabs for trailer vehicles have also been unified and revised. The existing quarterly motor vehicle tax on trailers weighing 15,000 is ₹2,550 and ₹130 for every increase in weight of 250 kg. For trailer weighing over 20,000 kg, it is ₹5,150 and ₹250 for every increase in weight by 250 kg. 

From now on, heavy-duty commercial vehicles weighing 15,000 kg and above (having six to 22 tyres) will have a unified quarterly motor vehicle tax; ₹2,550 and ₹130 for each 250 kg increase.

Idea is to attract more trailer vehicle registrations in Kerala.