Following implementation of the unified pan-India Goods and Services Tax (GST) from July 1, state-run oil marketers, which revise LPG prices on the first of every month, hiked the rate of a 14.2 kg subsidised cylinder to Rs 477.46, up from the pre-GST price of Rs 446.65.
Indian Oil Corp (IOC) also announced that the LPG prices per cylinder have gone up by Rs 31.67 to Rs 480.32 in Kolkata, by Rs 31.41 to Rs 465.56 in Chennai, and by Rs 14.28 to Rs 491.25 in Mumbai.
The central government clarified on July 1 that both domestic and commercial liquefied LPG grades will be taxed under the GST across the country, except in Jammu and Kashmir.
LPG has been placed in the lowest 5 per cent GST bracket, with the other rates in the new indirect tax structure being 12, 18 and 28 per cent.
The variation in price by location is a legacy of the earlier system. Pre-GST, most states did not tax LPG, while others levied value added tax (VAT) ranging between 2 per cent and 4 per cent. Domestic LPG attracted zero custom and excise duty.
Post-GST implementation, an LPG cylinder will cost around Rs 12-15 more in states that did not tax the clean fuel. In states that levied VAT, the increase will depend on the difference between the earlier tax and the GST rate.
Value added tax (VAT), or sales tax, was nil in states like Delhi, Haryana, Jammu and Kashmir, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal.
Oil companies' officials explained that the 5 per cent GST has resulted in a Rs 26.88 hike in rates in Delhi and the balance increase per cylinder is caused by the government's decision in June last year to reduce the LPG subsidy by raising prices by around Rs 2.
The price of the non-subsidised LPG, which consumers buy after exhausting their annual quota of 12 cylinders has also increased by Rs 11.50 to Rs 564. This category attracts 18 per cent GST.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
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