Excise and customs duty on domestic LPG cylinders reduced to zero
September, 24th 2012
In marginal relief to consumers, the government on Friday abolished import and excise duties on LPG cylinders they buy beyond the 6 per annum quota of subsidised cooking gas, and asked state governments to subsidise the requirements of households at their level.
The government had last week restricted supply of subsidised cooking gas to 6 per household in a year. Any requirement beyond this was to be purchased at market price, which currently works out to Rs 895 per 14.2 kg cylinder. After the abolishing of 5 per cent customs duty and 8 per cent excise duty, the consumer price in Delhi would come to Rs 798.
Subsidised cooking gas (LPG) in Delhi is currently sold at Rs 399 a cylinder.
"Since some LPG cylinders will not be subsidised, we have amended the notification for the non-subsidised household LPG cylinders... customs and excise (on them) will be zero", Chidambaram told reporters.
Non-subsidised commercial LPG cylinders, however, would continue to attract customs duty of 5 per cent and excise duty at 8 per cent.
Taking a cue from the Congress ruled states which have increased the number of subsidised cylinders to nine per year, the Minister asked other states to follow suit.
"I welcome the decision of certain state governments to subsidise three cylinders per year of LPG in addition to six cylinders for which the subsidy would be borne by the central government...I would commend all state governments to adopt such an approach", he said.
The Minister also welcomed the decision of the Bihar government to reduce VAT on diesel from 18 per cent to 16 per cent which would neutralise some of the impact of the Rs 5 price hike announced by the Centre last week.