Do you also not understand taxes entirely? Do you have a hard time with why and how tax is implemented? Don’t worry, you’re not alone. It’s always hard to see the amount in our bills go up, especially if it’s the gas bill. We know how important gas is in every household, it has taken the place of the 6th element you need to survive to an extent. But, did you know, there exists a tax on LPG Gas as well? Curious to know? Let’s find out more.
What are Taxes?
Taxes are a compulsory financial contribution. From every citizen of India, to fund other activities of the government. It goes to aspects such as infrastructure, education, healthcare, etc. There are different types of taxes, for example, there is a certain percentage of tax that implies your income (income tax), the purchases you make (sales tax), and even the property or land you own. Although they aren’t a pleasant expense, they are necessary to make sure society is functioning properly.
Did you know there are two types of taxes imposed on moving services? Read our take on different variants of tax on moving.
What is Goods and Services Tax?
GST is a much simpler taxing system, which replaces many other indirect taxes in India. Think of it as a one-stop solution that is levied on most of the goods and services you purchase, from groceries to haircuts. The idea is to streamline the process of tax, meaning instead of paying taxes at different stages, you pay a single GST rate when you purchase something.
Now, let’s come to the topic of the day, Tax on LPG Gas.
Tax on LPG Gas: GST Rates in India
According to the Central Board of Indirect Taxes and Customs (CBIC), domestic LPG gas cylinders fall under the 5% GST rate of the tax bracket. This tax is an imposition by the Central Government and the State Government has no say in this.
Ever since GST was introduced, it has entirely changed the tax system of India. There are 5 different tax brackets that vary for different goods. 0%, 5%, 12%, 18%, 28%.
Here’s a list of a few goods that fall under each tax bracket:
0% Tax Bracket: Products such as Milk, Eggs, Curd, Gram flour, and others come under the 0% tax bracket of GST
5% Tax Bracket: 5 % is levied on Tax on LPG Gas, Tea, Edible oil, and Spices
12% Tax Bracket: Items such as Butter, Ghee, Almonds, and Mobile fall under this tax bracket of GST.
18% Tax Bracket: Hair Oil, Soap, and Electronics such as printers, etc have a GST tax rate of 18%
28% Tax Bracket: 28% tax is on cars, air conditioners, refrigerators, etc
Tax on LPG Gas: Central and State variants
Now, you know that domestic LPG gas has a tax imposition of 5%, but there’s more. Apart from this tax rate of 5%, certain costs are not in consideration. Such as the commission of the distributor, delivery charges, and even establishment charges. All these additional costs, including tax on LPG Gas, add up to the total bill of gas, which you get at the end
As we established before, the state has no power over GST on cooking gas. However, the price varies depending on which state you are living in.
Tax on LPG Gas: Simplified
For instance: Let’s consider Pune as an example, and see how the breakdown of cost for a 14.2kg cylinder takes place.
| COMPONENTS | PRICE |
| Determined Market Price | Rs 806 |
| Addition of GST | Rs 40.3 |
| Commission of Distributor | Rs 61.84 |
| Retail Selling Price | Rs 908.14 |
Why Tax on LPG Gas?
Tax is on anything and everything. It is important to make sure the society as a whole functions properly. Although the introduction of GST is suppose to streamline the process. It doesn’t have a good impact on domestic cylinder users. According to reports, the price of domestic cylinders is to increase by 32 Rs per cylinder.
On the other hand, commercial cylinder users are seen to be benefiting from this implementation. Because earlier the cost of a commercial gas cylinder was around Rs 1.121. Which has gone down by a difference of Rs 69.
Although this doesn’t seem fair at first glance. The government has introduced LPG Subsidy for people who cannot afford to buy domestic gas cylinders at the retail selling price. If you want to know more about subsidy on LPG Gas, follow the link to this blog offering you a complete guide on LPG Insurance Policy.
Tax on LPG Gas: Statewide
All states ranging from Assam, Andhra Pradesh, Arunachal Pradesh, Bihar, Chattisgarh, Delhi, Gujarat, Himachal Pradesh, Haryana, Jharkhand, Kerala, Karnataka, and many others are liable to impose 5% Tax on LPG Gas.
Even the Union Territories: Andaman and Nicobar Island, Daman & Diu, Lakshadweep, Jammu & Kashmir along with others are also liable to impose a 5% Tax on LPG Gas.
Explore more about LPG Gas :
| Advantages of LPG Gas | Advantages of LPG Gas |
| LPG Subsidy Status | LPG Subsidy Status |
| 5kg Gas Cylinder Prices in Pune | 5kg Gas Cylinder Prices in Pune |
| 5 kg Gas Cylinder Price in Mumbai | 5 kg Gas Cylinder Price in Mumbai |
| LPG Subsidy Status | LPG Subsidy Status |
| Gas Aadhar Link | Gas Aadhar Link |
In a Nutshell
Taxes are a crucial aspect of any country’s economy, it’s like the piggy bank of the nation, the only difference being every citizen of India pitches money to be saved in the Piggy Bank. Tax on LPG Gas is at a rate of 5% for the domestic cooking gas cylinders we all use. Why do you need this information you ask? It’s important to know how much of your money is going toward taxes to work on a savings or budget plan for yourself. Being aware of this will help you make a conscious decision before making any purchase.
Think of it this way: The more knowledge you have about taxes and it imposition, the more at power you are, to cut back on costs, choose services that have a lower tax rate, altogether ensuring you are not spending too much either on taxes or on goods.
Since, you are loaded with knowledge about Tax on LPG Gas if you are looking to move and are trying to find a reliable moving partner, check us out for the best packing and moving services in town at Rajbala Packers and Movers.