| schema:text
| - Fact Check- Viral post falsely claims that state levies more tax on LPG cylinder than Centre
India Today Anti-Fake News War Room ( AFWA) has found that this viral claim is misleading. LPG taxing falls under the GST regime.
Listen to Story
India Today Fact Check
Taxing of LPG cylinders falls under the GST regime. For a domestic LPG cylinder, 5% GST is charged which is equally divided between the Centre and state. So, there is no disparity on the taxes charged on an LPG cylinder. The viral message is displaying a false figure.
Amid the rising fuel prices, a message has gone viral with the claim that the Central government levies only 5 per cent tax on an LPG cylinder whereas the state charges 55 per cent.
Showing a price break-up, the viral post on Facebook obliquely claims that state government taxes are the main reason behind the whopping price of LPG in the country.
India Today Anti-Fake News War Room ( AFWA) has found that this viral claim is misleading. LPG taxing falls under the GST regime.
For a domestic LPG cylinder, 5 per cent GST is charged, which is equally divided between Centre and state. So, there is no disparity in the taxes levied on an LPG cylinder. The viral message displays a false figure which has no connection to the real tax system.
LPG comes under GST
The viral claim and the break-up of the tax are vague as it does not specify whether it is about domestic LPG or commercial. It also does not specify which state’s tax system it is talking about. The LPG prices vary from state to state.
Liquefied petroleum gas (LPG), one of the three petroleum products, falls under the goods and services tax (GST) since last few years.
The domestic LPG cylinder falls under the 5 per cent slab of GST and is divided equally between Centre (2.5 per cent) and state (2.5 per cent).
So, there is no disparity in the central and state tax on the LPG cylinder.
Looking at a recent original consumer receipt for an LPG cylinder from the gas agency of Indian Oil Corporation, we can see that 5 per cent GST charge is levied on the price.
A senior official of the Indian Oil Corporation, who doesn’t wish to be named, refuted the viral claim calling it fake news.
“Since LPG pricing falls under GST, there is no question of state govt enjoying more taxes than the Centre”, the official told India Today.
So, the viral claim about the state charging 55 per cent tax on an LPG cylinder does not arise.
The LPG pricing
Several factors determine LPG pricing in India. It is calculated based on a formula — import parity price (IPP). The IPP is determined based on LPG prices in the international market, as the fuel is mostly imported into the country.
The IPP, based on Saudi Aramco’s LPG price, includes the FOB (free on board) price, ocean freight, insurance, customs duties, port dues, etc.
This price, quoted in dollars, is then converted to rupees then the cost of inland freight, marketing costs and margins charged by the oil companies, bottling charges, dealer commission, and the GST are all added.
The varying cost of transportation in different locations of the country is another factor that also determines the difference in LPG prices on the same day among different states.
The Centre provides a subsidy through direct bank transfer on 12 domestic LPG cylinders (14.2 kg) a year per household. Beyond 12 cylinders a year, the household has to pay the non-subsidised price.
The Government of India revises LPG prices every month.
The dealers’ commission
The claim also mentioned that the dealers' commission is just Rs 5.50, which is grossly wrong. Since dealers' commission is an internal issue, the oil companies normally do not want to share it publicly.
But as per a government order of the Ministry of Petroleum and Natural Gas in 2019, the dealers commission for domestic LPG distributors was revised to Rs 61.84 for the 14.2 kg cylinder and includes the establishment and the delivery charges. This same commission rate is also confirmed on the website of Petroleum Planning and Analysis Cell ( PPAC).
Hence, it is clear that the viral claim made about the central and state taxes and dealer's commission for an LPG cylinder is completely false.
Also read: Fact Check: Video of firecrackers at Taiwan festival shared as Italy’s Euro win revelry
Please share it on our at 73 7000 7000
You can also send us an email at factcheck@intoday.com
|
![[RDF Data]](/fct/images/sw-rdf-blue.png)
![[cxml]](/fct/images/cxml_doc.png)
![[csv]](/fct/images/csv_doc.png)
![[text]](/fct/images/ntriples_doc.png)
![[turtle]](/fct/images/n3turtle_doc.png)
![[ld+json]](/fct/images/jsonld_doc.png)
![[rdf+json]](/fct/images/json_doc.png)
![[rdf+xml]](/fct/images/xml_doc.png)
![[atom+xml]](/fct/images/atom_doc.png)
![[html]](/fct/images/html_doc.png)