Non-subsidy cylinders to cost less

Consumers will now have to pay less on non-subsidised domestic cooking gas cylinders as the government has decided to do away with the customs and excise duties on the refills which a household needs to purchase from the open market.

The decision on duty reduction on LPG cylinders comes into effect immediately.
Last week, the government restricted supply of subsidised cooking gas cylinders to six per household in a year. Any more cylinders would need to be purchased at the market price.

But, non-subsidised commercial LPG cylinders will continue to attract both import and excise duties.

“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,” Finance Minister P Chidambaram said here.

The price of non-subsidised LPG cylinders for domestic use in Bangalore will fall by roughly Rs 114 to Rs 702 per 14.2-kg cylinder from Rs 816 currently. The Value Added Tax of 1 pc on each cylinder will stay.

As per Ministry of Petroleum and Natural Gas figures, Karnataka had 74.84 lakh domestic connections and 531 distributors in 2011.

Each LPG cylinder attracts an excise duty of 8 per cent and an import duty of 5 per cent. The actual cost of a cylinder thus works out to be Rs 895, without subsidy. After the deduction, a 14.2 kg cylinder is expected to cost Rs 798 in Delhi.
The cost of each cylinder will, however, vary in different States.

Chidambaram also asked the States to further subsidise the cooking gas cylinders for the household. Other Congress-ruled states such as Andhra Pradesh, Assam, Uttarakhand, Maharashtra, Kerala, Haryana, Rajasthan, Manipur, Meghalaya, Mizoram and Arunachal Pradesh are expected to follow suit.

The cost of each subsidised LPG cylinder in Delhi is Rs 399.
Chidambaram also welcomed the decision of the Bihar government to reduce VAT on diesel from 18 per cent to 16 per cent.