Govt, oil cos pass the buck | india | Hindustan Times
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Govt, oil cos pass the buck

THE STEEP hike in LPG cylinder prices by Rs 24 has enraged consumers but they are still unable to comprehend who is the villain of the piece? The State Government or oil companies?

india Updated: Apr 10, 2006 11:48 IST

THE STEEP hike in LPG cylinder prices by Rs 24 has enraged consumers but they are still unable to comprehend who is the villain of the piece?  The State Government or oil companies? 

The State Government maintains that the cumulative tax on LPG cylinder has in fact come down. And that is quite clear too.

On the other hand, the oil companies’ defence is that since they have been deprived of the cushion that was expected after implementation of VAT in the State, they were forced to raise the basic issue price.

LPG price hike

BJP: Consumers should get the benefit of the reduction in tax by the Govt and companies’ hiking cylinder price is unjustified.

CPI: MP Govt’s increasing entry tax to 9.5 per cent will badly affect the common man and working class. Demand that Chief Minister and Finance Minister rollback the hike.

Akhil Bharatiya Udyog Vyapar Mandal: The hike is an ill effect of VAT implementation. Govt should immediately roll it back.



LPG Distributors’ Association: There’s no increase in our commission.

Thus, they are passing the buck on the Government. After sugar, LPG is the second commodity that has become the victim of post-VAT confusion. The bottom line, however, is that consumer is the sufferer. Price of LPG cooking gas, which was Rs 304.80 per cylinder, has now gone up to Rs 328.95.

The recent increase in entry tax on cylinders from one to nine per cent has been stated to be the cause of price hike.

Alleging that the price-hike was due to the oil companies’ stand to reduce their loss margin, the State Government claimed that under VAT, tax burden on LPG cylinders has actually come down by 1.3 per cent.    

Commercial Tax Principal Secretary GP Singhal told Hindustan Times before  VAT implementation that the State Government imposed 13.8 per cent commercial tax and one per cent entry tax. But, in the VAT regime, LPG has been kept in the four per cent tax slab as ‘declared goods’ with 9.5 per cent entry tax.