The Ministry of Heavy Industries and Public Enterprises, Department of Heavy Industry, has announced reduction on the Goods and Services Tax (GST) on purchase of a vehicle for differently-abled individuals. At present, a consumer pays a minimum GST of 28 percent on purchase of a new passenger vehicle.
The government says the concessional rate of GST for motor vehicles for the use of persons with orthopaedic physical disability was notified by the Ministry of Finance in a notification on June 28, 2017 and has been amended from time to time. Following the same, on September 30, 2019, the finance ministry notified that the integrated tax rate and related Central GST and State GST, a concessional rate of 18 percent for passenger vehicles used by and registered in the name of individuals with orthopaedic physical disability.
The concessional GST is applicable for vehicles not exceeding 4000mm length. Petrol, LPG, CNG vehicles with engine capacity up to 1200cc, and for diesel engine not exceeding 1500cc. DHI says, the concessional rate will be available for individuals with orthopaedic physical disability of equal to or greater than 40 percent, irrespective of the fact that the applicant drives the vehicle himself or otherwise.
To avail 18 percent GST, the applicant will need to make a application to the DHI, submit a medical certificate and a self-declaration. An individual can avail the concession if he/she has not availed this concession in the last five years and he will not dispose of the vehicle after availing the GST concession for a period of five years from the date of purchase.
After obtaining the necessary certificates, when a customer buys a vehicle the car dealers would be required to charge concessional rate of GST to the individual in whose name GST certificate is issued and stamp the invoice of all such vehicles purchased with GST concession with hologram symbol of 'To be registered as Adapted vehicle.'
This move is likely to encourage orthopaedic physical disabled individuals to purchase a vehicle, and in turn may likely help increase passenger vehicle sales.