Kerala drops VAT on gas cylinders

The Kerala Government has decided to forgo value added tax (VAT) on the subsidy component of domestic LPG cylinders in the state. The Cabinet decision translates to a price reduction of about Rs 40 per cylinder.

By not realising the VAT on subsidised LPG, the state government will forgo about Rs 247 crore annually.

Chief Minister Oommen Chandy told reporters on Sunday that the government was trying to bring orphanages and charitable institutions under the LPG subsidy cover.

He also targeted the opposition CPM over its recurring protests against LPG price rise. The LDF had ended its latest strike against the LPG price hike on Saturday, claiming that the state-wide agitation forced the Union government to raise the number of subsidised domestic LPG cylinders in a year from nine to 12. The strike, held at about 1,400 locations across the state, ended on its fourth day.

The government did not increase the annual number of subsidised cylinders to each household because of the CPM agitation, and the opposition party had to call off its strike because it was losing public support, said Chandy.

The state has been planning the removal of VAT following criticism over recurring LPG price hikes.

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