No, State Governments Don't Levy 55% Tax on Cooking Gas
The post lists an incorrect breakdown of the current price for domestic LPG cylinders amid rising LPG prices.
Amid rising costs of domestic cooking gas, a post which breaks down the current price of LPG cylinders is doing the rounds claiming that the state governments charge nearly 55 percent tax on domestic LPG cylinders.
The text post lists the basic price of gas and adds state and central taxes, overheads and other costs. It then asks readers to find which government is 'guilty' for the high prices of cooking gas.
However, the claim is misleading. LPG cylinder is under the tax bracket of 5 percent Good and Services Tax (GST), with both the Centre and states charging a 2.5 percent tax on them. Moreover, from 2019 onwards, the dealer's commission on LPG has been officially capped at Rs 61.84.
The text post breaks down the price of cooking gas cylinders, providing specific costs for taxes and overheads.
The Quint received this query on its WhatsApp tipline as well.
CLAIM 1: STATES CHARGE 55% TAX ON LPG CYLINDERS
The Central Board of Indirect Taxes and Customs' (CBIC) website lists Goods and Services Tax (GST) rates for a variety of goods and services, with a clear division of Central GST rates (CGST) and state or Union territory GST rates (SGST/UTGST).
Both rates combined make up IGST (Integrated Goods and Services Tax), which is the implementable rate.
Here, we found that the CGST and SGST charged on domestic LPG is 2.5 percent each, combining to a total of a 5 percent IGST rate.
The Indian Oil Corporation's website also lists the GST rate for domestic LPG at 5 percent. Clearly, the claim that states levy 55 percent tax on domestic LPG is incorrect.
CLAIM 2: DEALER'S COMMISSION AT Rs 5.50
The Petroleum Planning and Analysis Cell (PPAC), which is a body under the Ministry of Petroleum and Natural Gas, monitors data and policy analysis of India's hydrocarbons sector.
The PPAC published a consolidated report of data and developments from different divisions and companies, called a 'Ready Reckoner'.
This report shows an abridged overview of India's oil and gas data related to consumption, production, taxes and duties of petroleum products.
As per PPAC's Ready Reckoner for May 2021, the dealers' or distributors' commission for domestic LPG is set at Rs 61.84.
On their website, under Petroleum prices, we found another document that showed that the current commission rate for 14.2 kg domestic LPG cylinders has been in effect since October 2019.
Clearly, the claim regarding the taxes on LPG and the computation of the final LPG cylinder prices is incorrect.
The combined GST for both, the state and the central government for domestic LPG stands at 5 percent and the official cap on dealers' or distributors' commission for cylinders has been set at Rs 61.84 since late 2019.
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