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.
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.”
Newschecker received multiple queries for this claim on its Whatsapp tip line (9999499044) for verification.
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%).
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.
Additionally, LPG pricing in India is determined by several factors including location and import parity price and is revised every month.
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.
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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