Delhi High Court Questions Centre Over Removal of GST Concessions for Differently-Abled Car Buyers

New Delhi – The Delhi High Court has directed sharp queries at the Central Government regarding its decision to effectively nullify a Goods and Services Tax (GST) concession previously available to differently-abled individuals for the purchase of cars. A division bench, comprising Chief Justice DK Upadhyaya and Justice Tushar Rao, is scrutinizing a policy change that, while lowering the general GST rate on vehicles, removed the specific benefit extended to persons with locomotor disabilities, raising significant questions about the state's commitment to the principles of positive discrimination and the Rights of Persons with Disabilities Act (RPwD Act).

The Court was hearing a writ petition, All India Confederation Of The Blind (AICB) v. UoI [W.P.(C) 9971/2025], which challenges a notification issued by the Union Ministry of Heavy Industries. The petitioner, represented by Advocate Rahul Bajaj, argues that the Centre’s move is a regressive step that undermines the statutory and constitutional rights of disabled citizens.

The bench has asked the Central Government Standing Counsel (CGSC) to seek specific instructions on the matter and file a counter affidavit, scheduling the next hearing for December 17.

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The Contested Policy Shift: A Benefit Given and Taken Away

The crux of the matter lies in a change to the GST structure for vehicles. Previously, vehicles were taxed at a GST rate of 28%. However, a special concession was granted to persons with certain locomotor disabilities, who were required to pay a concessional rate of 18%. This 10% reduction was a crucial financial relief, aimed at promoting mobility and accessibility for a vulnerable section of the population, in line with the objectives of the RPwD Act.

The controversy arose from a new notification issued by the Union Ministry of Heavy Industries on October 8, 2025. This notification revised the GST rate for all vehicles, bringing it down from 28% to a uniform 18%. While appearing to be a general tax reduction, this change had a significant adverse effect on the differently-abled community. By making 18% the standard rate for everyone, the notification effectively erased the exclusive concession that disabled persons previously enjoyed. They are now required to pay the same rate as any other buyer, losing the financial advantage specifically designed to accommodate their needs.

The All India Confederation of the Blind (AICB) swiftly challenged this move, contending that it constitutes an arbitrary withdrawal of a vested benefit and is contrary to the legislative intent of empowering persons with disabilities.

Petitioner's Arguments: A Violation of the RPwD Act

Appearing for the petitioner, Advocate Rahul Bajaj presented a forceful argument that the government’s action is a direct contravention of the Rights of Persons with Disabilities Act, 2016. This landmark legislation mandates the government to create an inclusive and accessible environment for disabled persons. The petitioner contends that providing concessions for essential tools of mobility, like cars, is not a matter of charity but a fulfillment of this statutory duty.

The argument is that while the government is free to set tax rates, it cannot do so in a manner that creates a disproportionate disadvantage for a protected group or withdraws an existing affirmative action measure without compelling justification. By equalizing the tax rate, the government has ignored the principles of substantive equality, which recognizes that treating unequals equally can perpetuate disadvantage. The petition posits that the withdrawal of the concession is arbitrary and fails the test of reasonable classification under Article 14 of the Constitution.

The High Court’s Incisive Inquiry

The division bench displayed a keen understanding of the issue's gravity, expressing its reservations about the government's rationale. The judges pointedly questioned why a corresponding benefit was not maintained for the differently-abled when the general tax rate was lowered. The bench wondered aloud, “why corresponding proportionate decrease in the rate of GST to be levied from persons who are Orthopedically and Visually Disabled Persons, cannot be brought into effect.”

This observation goes to the heart of the matter. If the government’s intention was simply to lower the overall tax burden, a proportionate reduction could have been applied to the concessional rate as well. For instance, the new concessional rate could have been set at 8% or 10% to maintain the original 10-percentage-point benefit. The failure to do so suggests a policy decision to scrap the concession entirely, which the Court appears to find prima facie questionable.

In a striking observation reported by some media outlets, the bench characterized the move as a form of “positive discrimination,” a term typically associated with affirmative action. While the phrasing is unusual in this context—as the action removes rather than provides a benefit—it underscores the Court's view that the government is actively creating a disadvantage for a group it is constitutionally and statutorily obligated to protect.

The Court’s line of questioning signals a potential judicial intervention to protect the rights established under the RPwD Act from being diluted through administrative or fiscal policy changes.

Legal and Social Implications

This case is being closely watched by disability rights advocates and the legal community for several reasons:

1. Protecting Affirmative Action: The outcome will be a significant indicator of how robustly the judiciary will protect affirmative action policies. It will test whether benefits granted to marginalized groups can be withdrawn under the guise of uniform policy-making.
   
   
2. Interpreting the RPwD Act: The Court's final decision will contribute to the jurisprudence surrounding the RPwD Act, clarifying the extent of the government's obligation to provide "reasonable accommodation" and ensure substantive equality.
   
   
3. Judicial Review of Tax Policy: While courts are generally hesitant to interfere in fiscal policy, this case highlights an exception where tax policies intersect directly with fundamental rights and statutory protections. The High Court’s willingness to scrutinize the effect of the GST notification, rather than just its form, is a crucial aspect of its judicial review function.
   
   
4. Impact on Mobility and Independence: For many differently-abled individuals, a personal vehicle is not a luxury but an essential tool for employment, education, and social integration, especially given the accessibility challenges in public transport. The financial implications of this GST change directly impact their independence and quality of life.

As the Central Government prepares its response, it will need to provide a compelling justification for why a policy aimed at empowering the differently-abled was rescinded. The Delhi High Court's initial observations suggest that a simple argument of tax uniformity is unlikely to suffice in the face of strong statutory mandates and constitutional principles of equality. The case now stands as a critical test of the government's commitment to its most vulnerable citizens.