Friday, July 23, 2021
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HomeFact checkState Government’s Do Not Levy 55% Tax on LPG Cylinders, Viral Message...

State Government’s Do Not Levy 55% Tax on LPG Cylinders, Viral Message Is False

Amid an increase in fuel prices, a message claiming that the Central government levies a 5% tax on LPG cylinders, while the State government charges a 55% tax has gone viral on Whatsapp and other social media platforms. 

Claim on State government's charging 55% tax on LPG cylinder
Claim on State government’s charging 55% tax on LPG cylinder

The viral message shows a break-up of the basic price, dealer’s commission, transportation, Central government tax, State government tax, etc. The end of the message reads, “Central Govt. Tax 5%, State Govt. Tax 55% so Please find which Government is guilty for hiking the cooking gas price.”

The LPG State government tax claim has been shared by users on Twitter and Facebook as well. 

Newschecker received multiple queries for this claim on its Whatsapp tip line (9999499044) for verification. 

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Fact Check / Verification

Note the claim does not include the source of its data nor does it mention which particular state’s tax system is in context. This is important since LPG prices vary from state to state.

Domestic Liquefied Petroleum Gas (LPG) grades have been taxed under the Goods and Services Tax (GST) since 2017. They’ve been placed in the lowest 5% GST bracket. Also, the Central and the State governments do not levy their own separate taxes on the LPG cylinders. 

As per the Central Board of Indirect Taxes and Customs (CBIC) website, domestic LPG cylinders fall under the 5% GST slab. This is split equally between the Centre and State (CGST – 2.5% + SGST – 2.5%). 

Screenshot of LPG taxes on the CBITC website
Screenshot of LPG taxes on the CBITC website

A government circular issuing clarification on GST rates also states that LPG for domestic use will attract a GST rate of 5%. 

Also, contrary to the claim where the dealer’s commission is given at Rs 5.50, the Petroleum Planning & Analysis Cell (PPAC) website shows the dealer’s/ distributor’s commission at Rs. 61.84 on a 14.2 kg LPG gas cylinder. In July 2019, the government issued an order to revise the distributor’s commission to Rs 61.84. 

Screenshot of Government of India's order on revised domestic LPG distributor's commission, 2019
Screenshot of Government of India’s order on revised domestic LPG distributor’s commission, 2019

Additionally, LPG pricing in India is determined by several factors including location and import parity price and is revised every month.  

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Conclusion

Our research makes it clear that a GST of 5% is levied on the domestic LPG cylinders and no State imposes a 55% tax on it. Also, the Central and the State governments do not levy their own separate taxes on the LPG cylinders. 

Result: False 

Our Sources

Hindustan Times: https://www.hindustantimes.com/business-news/with-gst-domestic-lpg-gets-costlier-but-commercial-lpg-is-cheaper/story-Iw62YPyDJChLQoit8or95N.html

Central Board of Indirect Taxes and Customs: https://cbic-gst.gov.in/gst-goods-services-rates.html

Government of India circular: https://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular-No-80.pdf;jsessionid=CF2174E6F711134C16FF3FA9496DB532

Petroleum Planning & Analysis Cell: https://www.ppac.gov.in/content/149_1_PricesPetroleum.aspx

Government of India order: http://petroleum.nic.in/sites/default/files/LPGDC.pdf


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Nikita Vashisth
Nikita is a writer and editor for English fact-checking. She also leads projects to understand the misinformation and fake-news ecosystem—with an emphasis on data and psychology. Previously, she has worked with IndiaSpend, CNN-News18 and written for Citizen Matters and Mongabay-India on the environment, health, and politics. She’s a postgraduate of the Computational Journalism program at Cardiff University, Wales.

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