The Ministry of Finance, Government of India, has allowed a concessional rate Goods and Services Tax (GST) of 18% as against the applicable rate of 16% and 24% (a) on cars being able to be driven by the physically disabled; or (b)on cars which has been suitably designed to be able to be driven by physically disabled; or (c) on cars meant for physically disabled.
Eligibility: Concessional rate of GST to persons with disability is applicable to those persons who are having orthopedic physical disability of equal to greater than 40 % disability irrespective of the fact that the applicant drives the vehicle himself or otherwise. GST concession is granted by Ministry of Finance vide its notification dated 28th June 2017, amended on 30th September, 2019.
Vehicles Allowed: The concession can be availed for following motor vehicles of length not exceeding 4000 mm only, namely
- Petrol, LPG or compressed natural gas driven vehicles of engine capacity not exceeding 1200 cc
- Diesel driven vehicles of engine capacity not exceeding 1500 cc
Procedure: In supersession of all previous guidelines issued by Department of Heavy Industry, Revised Guidelines for issue of GST concession certificate for purchase of vehicles by the persons with Orthopedic Physical Disability vide notification 24th October 2019 details the procedure.
As per the revised guidelines, the applicant with orthopedic disability shall:
(a) Make an application to Department of Heavy Industry (DHI) in the format prescribed at Annexure A.
(b) Submit a Medical certificate duly signed and countersigned in prescribed format placed at Annexure B. These guidelines were further modified vide OM dated 25 March 2020 with the insertion of:
"Applicants already having a Unique Disability Card issued by GoI/ Disability card issued by State Govt./District authority, wherein the nature and percentage of disability is clearly specified, are not required to furnish Medical Certificate stipulated in Annexure 'B' of the application."
(c) The October 2019 guidelines had the requirement of submitting the copy of Income Tax Return (ITR) filed for the last three years by the applicant but this was removed in amended guidelines in March 2020 and now applicants are NOT required to furnish their ITR.
(d) Submit a Self-declaration stating that he 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 5 years from the date of purchase in prescribed format placed at Annexure C
(e) Among other details, applicant is required to submit the details of Vehicle Model they intend to purchase along with name of dealer from whom vehicle will be purchased and name of RTO, where vehicle will be registered.
(f) After processing of the application, DHI is expected to issue certificate for availing the GST concession in the prescribed format placed at Annexure D to the applicant within a period of 4 weeks from the date of receipt of application, complete in all respect.
(g) The said Certificate for availing the GST concession would be valid for a period of three months from date of issue of the certificate and the vehicle would have to be purchased by the applicant within this three months period to avail the concession.
(h) DHI will send a copy of the certificate to respective dealer, Original Equipment Manufacturers (OEM) and Regional Transport Office for their record and cross check/confirmation.
(i) 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 cars purchased with GST concession with hologram symbol of 'To be registered as Adapted vehicle’.
(j) All vehicles sold on the strength of certificate issued by DHI and with concessional GST would be registered as “Adapted Vehicle”, as per new Motor Vehicle Act 2019. Ministry of Road Transport and Highways (MORTH) would issue necessary instructions in this regard.
