LPG consumers will be in for a shock with the GST regime rolled out as the prices of new cylinder will shoot up by Rs.32 from July 1, as GST removes the 5% tax bracket for domestic LPG cylinders.
However, the new price varies from state to state depending on VAT imposition which ranged from 2 to 4% earlier. Another add-on for LPG cylinders is the increase in credit card service charges which will be 3% more than earlier and the so-called payback of Rs.7.50 for those using credit cards will be offset with the GST tax.
So, all the consumers who pay in full and get subsidy amount back in their accounts will now get Rs.20 to 30 less, making the indirect effect on consumers not felt immediately. However, for commercial or business users, the GST will provide 5% tax benefit under the new rules, reflecting the pro-business class GST tax structure.
While the move is apparently to dissuade diversion of household gas for commercial use, the measure is a typical one slap for all. With the international prices for natural gas rising, it is unlikely that the LPG household consummers will get reprieve in the near future.
With the GST tax compliance online getting murkier with too many forms and ambiguity, the government machinery is currently bogged down with more technical problems than worry about the high tax regime rolled out on ordinary consumers.