GST impact: Subsidised cooking gas gets costlier by up to Rs32 per cylinder

Domestic cooking gas (LPG) price has been hiked by up to Rs32 per cylinder — the steepest increase in six years — following implementation of the Goods and Services Tax (GST).

Subsidised LPG rates have been increased to Rs477.46 per 14.2-kg cylinder from Rs446.65 in Delhi after GST was implemented from 1 July.

In the previous indirect tax regime where separate factory-gate duty and sales tax were levied, LPG attracted a zero or nil excise duty all over the country. VAT or sales tax was nil in Delhi as well as Chandigarh, Haryana, Jammu and Kashmir, Rajasthan, Tamil Nadu, Uttar Pradesh, West Bengal and some north-eastern states. It ranged from 1% to 5% in other states.

However, under GST, which subsumed more than a dozen central and state levies, a 5% tax was levied on subsidised LPG. This essentially meant that states where VAT was nil or less than 5%, rates have gone up.

Besides Delhi, subsidised LPG price has been hiked by Rs31.67 per cylinder to Rs480.32 in Kolkata and Rs31.41 in Chennai to Rs465.56, according to information available from oil companies. In Mumbai, where a VAT of 3% was applicable previously, the price has gone up by Rs14.28 to Rs491.25 per cylinder.

This is the steepest increase in domestic subsidised LPG rate since 25 June, 2011, a hike of Rs50 per cylinder, which was necessitated due to a jump in international oil prices.

Every household is entitled to 12 cylinders of 14.2-kg each at subsidised rates in a year. Any requirement beyond that has to be purchased at market price.


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