In an upcoming GST Council meeting on October 7, 2023, the Goods and Services Tax (GST) rate for motor vehicles purchased by visually impaired individuals may be discussed, according to a reliable source. This follows a recent Madras High Court ruling, declaring that visually impaired citizens are entitled to a concessional GST rate for vehicle purchases.

Presently, only orthopedically disabled persons benefit from an 18 percent concessional GST rate on motor vehicle purchases. This rate also applies to petrol, liquefied petroleum gas (LPG), or compressed natural gas (CNG) vehicles with an engine capacity not exceeding 1,200cc, as well as diesel-powered vehicles with an engine capacity not exceeding 1,500cc, provided the vehicle’s length does not exceed 4,000mm.

The 18 percent concession for motor vehicle purchases by orthopedically disabled individuals has been retained from the pre-GST era. The Madras High Court’s judgment, delivered on June 26, 2023, in response to a writ petition by Carunia Seelavathi, a visually impaired person, affirmed her eligibility for GST concessions akin to those available to orthopedically disabled individuals.

The High Court directed the relevant authority to grant the petitioner an exemption from motor vehicle tax and GST within four weeks. However, an appeal was filed before the Madurai bench on September 7, 2023, along with a stay application, arguing that the decision regarding exemption falls within the purview of the GST Council as a policy decision.

Regarding this matter, the GST Council had previously discussed it during its 47th Meeting. The council opined that while the proposal had merit, adjusting GST rates might not be the most appropriate method of providing relief, as it could lead to distortions in the GST rate structure. Instead, it suggested that concessions for persons with disabilities should take the form of reimbursement of GST already paid, managed through direct transfers via the Department of Empowerment of Persons with Disabilities (DEPwD).

Once DEPwD decides to implement this scheme through direct transfers, it will determine which category of disability qualifies for coverage under the scheme.

This development underscores the ongoing dialogue surrounding GST rates for differently-abled individuals’ vehicle purchases, with potential implications for policy and taxation in this domain.

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