Amid the rising fuel prices, a price break-up chart of LPG cylinders is being shared on social media with the claim that the state government charges 55 percent tax on the domestic gas cylinders while the central government charges only 5 percent.
A Facebook user Sandu Numismatist shared the break-up chart with the caption that reads “Think Twice before Abusing Modiji !” According to the viral price-break up, the base price of the LPG cylinder is Rs. 495, the central government imposes a tax of Rs. 24.75 and the state government levies Rs. 291.36. The dealer’s commission is Rs. 5.50, transportation charge (state + central) Rs. 25 and there is a subsidy of Rs. 19.57. So according to the viral figure, the total amount adds up to Rs. 861.18.
We found several Facebook users have shared the same price break-up.
A Twitter user Rajendra Varma Veligandla has also posted the viral price break-up of LPG cylinders.
The claim of the state government charging 55 per cent tax and commission of dealer to be Rs. 5.50 is misleading. We checked the bill of the domestic LPG cylinder dated 18 July 2012 and found the GST (Goods and Services Tax) levied by the central and state government is 2.5 percent each. A total of 5 percent is levied as a tax on domestic LPG cylinders, however, the tax amount is equally divided by the central and state governments.
In the claims, it is not specified for which category of the Liquefied Petroleum Gases (LPG) cylinder, the state government charges 55 percent tax. We checked the government website of the Ministry of Finance. According to the website, central and state governments impose 5 percent (2.5 percent+2.5 percent) tax on LPG for the domestic household category and there is no other category in which the state charges 55 percent tax on LPG.
In May 2021, the Petroleum Planning and Analysis Cell of the Ministry of Petroleum and Natural Gas published a report of 43 pages. On page 37 under the subheading ‘Taxes and Duties on Petroleum Products,’ we found a tax break-up chart on different petroleum products.
According to the chart, Basic customs duty and Excise duty on domestic LPG is not applicable, however, domestic LPG falls under the 5 percent tax slab of the GST. And the dealers ‘/distributors’ commission is Rs. 61.84 which is far more than what is being claimed.
The dealers’/distributors’ commission includes delivery charge which is picking up the cylinder from the bottling plant and delivering it to the consumer. It also includes costs such as salaries, rent, power, and telephone bills.
The viral price break-up chart is misleading. Neither the state government charges 55 percent tax nor the dealer’s commission is Rs. 5.50 on the domestic LPG cylinders.