MC Exclusive: GST Council to discuss lower rate on motor vehicles purchased by visually impaired

The concession rate of 18 percent on purchase of motor vehicles for orthopedically disabled persons has been continued from the pre-GST regime. Representative image

The GST Council is likely to discuss lowering of Goods and Services Tax (GST) rate from the current 28 percent on motor vehicles purchased by the visually impaired, in its October 7 meeting, a person aware of the development has said. The issue will be discussed in the Council after a Madras High Court decision which stated that the visually impaired petitioner is eligible for the concessional GST rate on the purchase of motor vehicles, the person told Moneycontrol.

Presently, only orthopaedic physically disabled are eligible for a concessional GST rate of 18 percent on the purchase of motor vehicles. The orthopaedically disabled persons can also avail 18 percent GST rate on petrol, liquefied petroleum gases (LPG), or compressed natural gas (CNG) driven vehicles of engine capacity not exceeding 1,200cc, and diesel-powered vehicles of engine capacity not exceeding 1,500 cc. In all cases, the lower rate is available on motor vehicles of length not exceeding 4,000 mm.

The concession rate of 18 percent on the purchase of motor vehicles for orthopaedically disabled persons has been continued from the pre-GST regime. The Madras High Court in the matter of a writ petition filed by Carunia Seelavathi, a visually impaired person, passed a judgement on June 26, 2023, that the petitioner is eligible for GST concession for the purchase of a vehicle, as is presently available to orthopedically disabled persons.

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The High Court directed that the Authority concerned shall ensure that necessary orders exempting the petitioner from the motor vehicle’s tax as well as GST within four weeks from the date of receipt of the letter. An appeal was filed before the Madurai bench on September 7, 2023, along with a stay application on the said judgement on the grounds that the decision whether or not to provide exemption is to be determined by the GST Council and is a policy decision, he said.

GST Council's view
The GST Council in its 47th Meeting had discussed this issue. During the discussion, it was opined that while there is merit in the proposal, GST rate tweaking may not be an appropriate method of relief as GST rate structure revision based on end-use creates distortion.

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“The Council had earlier said that the benefit/ concession to persons with disabilities (Divyangjan) on purchase of vehicle should be in the form of reimbursement of GST already paid, which should be done through direct transfer through the budgetary route by the Department of Empowerment of Persons with Disabilities (DEPwD). Once a decision is taken to implement the scheme by DEPwD, through direct transfers, it is for the DEPwD to decide as to which category of disability needs to be covered under the scheme,” the person said.

As of now, no such scheme has been formulated by DEPwD.