GST, cut in subsidy drive up LPG cylinder price
Households will have to shell out up to Rs 32 more for each cooking gas (LPG) cylinder from this month due to the twin impact of GST and a reduction in subsidy.
Consumers will also have to pay more for the two-year mandatory inspection, installation, administrative charges for documentation for new connections and additional cylinders as these have been put in the 18% slab under GST.
LPG has been put in the 5% GST slab. Earlier, most states such as Delhi did not tax the green fuel, while some levied VAT ranging between 2% and 4%. Following the introduction of GST, the price of each LPG cylinder will rise by Rs 12-15 each in states that did not tax the fuel. The increase will depend on the gap between the GST rate and prevalent tax in states that levied VAT. A simultaneous reduction in subsidy amount from June will compound the impact for consumers. “The subsidy amount of Rs 119.85 paid to eligible consumers in Agra, for example, till June has also been reduced. According to the new notification, they will receive only Rs 107 in their bank accounts, “Vipul Purohit, national secretary, All India LPG Distributors Federation, told TOI.
Both the changes will have a combined impact of up to Rs 32 per cylinder, depending on the state. The small variation in prices among states is due to variable costs, such as transportation and logistics.
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Senior executives of state run fuel retailers said there was no change in the subsidy paid to consumers due to GST. The subsidy amount varies each month due to variation in the gap with the international price. The tax component has to be borne by consumers just like they did in case of VAT.
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