No, states do not levy 55% tax on domestic LPG cylinders - Alt News
Pooja Chaudhuri
17th July 2021 / 9:50 pm / Last updated: 9th November 2021
A chart breaking down the price of LPG used by domestic customers for cooking has been shared on social media. It claims that the central government taxes Rs 24.75 per LPG cylinder while state governments add a tax of Rs 291.36. The price break-up also includes a dealer’s commission of Rs 5.50 and reads at the end, “Central Govt. Tax 5%, State Govt. Tax 55% so Please find which Government is guilty for hiking the cooking gas price. (sic)”
The claim was also shared in July.
GAS (LPG)
^^^^^^^^
Basic price ……….Rs. 495.00
Central Govt Tax..Rs. 24.75
Transportation. Rs. 10.00
…
Posted by சுசீந்திரம் பாஜக on Thursday, 15 July 2021
The claim has been shared against the backdrop of the Modi government heavily criticised for rising domestic LPG prices. “A 14.2 kg LPG (Liquefied Petroleum Gas) cylinder that cost Rs 594 in Delhi on July 1 last year now comes for Rs 834.5,” reported The Times of India. The rise in prices can be linked to the increase in international crude oil prices and the devaluation of the Rupee. The end consumer is further burdened as the government has eliminated subsidies on LPG.
The claim was massively viral on Facebook. Alt News has also received multiple fact-check requests on its WhatsApp helpline number (+91 76000 11160).
Several Twitter users have also amplified the claim.
Goods and Services Tax (GST) is levied on LPG for domestic consumption to the tune of 5%. This is shared equally between the centre and state – 2.5% each. The claim that the central government levies 5% tax whereas the state levies 55% tax is false. The GST slab can be checked on the website of the Central Board of Indirect Taxes and Customs.
A report published by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Natural Gas and Petroleum in May 2021 gives the break-up of the taxes levied on domestic LPG. As seen below, only GST is applicable.
The report also states that the dealers’ commission per 14.2 kg cylinder is Rs 61.84. This is the commission given to LPG distributors and “goes towards delivery charges, that includes picking up the cylinder from the bottling plant and delivering it to the consumer, establishment costs such as salaries, rent, power and telephone bills.” The dealers’ commission is fixed by the petroleum ministry. The viral message falsely claims that the dealers’ commission is Rs 5.50.
Furthermore, the government has not provided a subsidy for LPG since last year. Alt News had published a detailed report on how LPG prices are determined that can be accessed here. Readers can also access the price build-up of domestic LPG here.
The viral claim that states levy a higher tax (55%) on domestic LPG than the centre (5%) is false. It is taxed at 5% GST which is equally shared between the centre and state. The claim has been promoted in support of the Modi government under criticism for rising domestic LPG prices.
Pooja Chaudhuri is a senior editor at Alt News.
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