New Delhi: Domestic cooking gas (LPG) price has been hiked by up to Rs. 32 per cylinder — the steepest increase in six years — following implementation of the Goods and Services Tax (GST). Subsidised LPG rates have been increased to Rs. 477.46 per 14.2-kg cylinder from Rs. 446.65 in Delhi after GST was implemented from July 1.
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 per cent to 5 per cent in other states.
However, under GST, which subsumed more than a dozen central and state levies, a 5 per cent tax was levied on subsidised LPG. This essentially meant that states where VAT was nil or less than 5 per cent, rates have gone up.
Besides Delhi, subsidised LPG price has been hiked by Rs. 31.67 per cylinder to Rs. 480.32 in Kolkata and Rs. 31.41 in Chennai to Rs. 465.56, according to information available from oil companies. In Mumbai, where a VAT of 3 per cent was applicable previously, the price has gone up by Rs. 14.28 to Rs. 491.25 per cylinder.
This is the steepest increase in domestic subsidised LPG rate since June 25, 2011, a hike of Rs. 50 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. The rate of market-priced 14.2-kg cylinder in Delhi is Rs. 564.
Sources said the 5 per cent GST resulted in a Rs. 26.88 increase in rate per cylinder in Delhi and the remaining hike of about Rs. 3 is because of the decision since June last year to raise prices by about Rs. 2 to cut the subsidy.
The rate of non-subsidised LPG, which consumers pay after exhausting their quota of below-market priced bottles, went up by Rs. 11.5 to Rs. 564. Such bottles attract an 18 per cent GST.