GST Impact: LPG costlier on GST, lower subsidy


The prices of some household items have come down after the introduction of the GST, but there are fears that the prices of LPG will go up. If a media report is to be believed, the prices of LPG cylinder are likely to go up by Rs 32 in some states.

The reason behind this is that some states, such as Delhi, until now, did tax the LPG while some charged VAT between 2 and 4 per cent.

In comparison, LPG has been put in the 5 per cent basket under the GST. Moreover, the amount of subsidy has also been reduced, effective June, 2017.

The price rise is expected to be anywhere between Rs 12 and Rs 15 per cylinder, in states that earlier levied no tax on the fuel, according to the Times of India report. In other states, the rise will depend on the gap between the rate of GST on LPG and rate of VAT applicable earlier.

But the combined impact of GST and reduction in subsidy could mean an increase of about Rs 32 in total.

Not only this, the common man will also have to pay more for installation, administration and documentation charges for new connections and also for the mandatory two-year inspection.

Additional cylinders have been put under 18 per cent tax slab.

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