BENGALURU: Private LPG companies are up in arms against differentiated tax levied on them under GST. These companies now have to pay a higher rate of tax for domestic LPG, compared to public sector companies. While government-owned companies fall under 5% tax slab, the private firms have to pay 18%. Customers who are registered with private companies for domestic LPG also have to shell out at least `100 more per cylinder, than those registered with government-owned companies.
The GST regulations clearly state that a 5% tax is levied on domestic LPG supplied by the three public sector firms — Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd. The rules also specify a 18%tax slab for petro products other than domestic LPG.
Over the last four months, industry representatives reached out to several government officials concerned but had failed to elicit a response, said M G Balakrishna, joint secretary, Confederation of Indian LPG Industry.
There are at least 10 private players in the domestic LPG sector in Karnataka — Indo Gas, Sree LPG, Jyothi Gas, MVR Gas, Quality Gas, Surya Gas, Puttur Petro, Aegis Pure Gas, Total Gas and Super gas among others.A higher tax slab for the same product, has put an enormous pricing pressure, those in the industry said. Before GST was implemented, all LPG firms paid 1% tax, said those in the industry with whom Express interacted.
While on one hand they are forced to pass on the burden to the customer by increasing the price per cylinder by at least `100, on the other they are also under pressure to retain competitive prices as they do not want to lose out on customers.
“It has now become a question of our very existence. Eventually people will look at subscription with government companies if we are not able to manage the prices. There are thousands of distributors dependent on this for their livelihood,” added S N Parthanath, president, Karnataka LPG Bottlers’ Association.
Narayana Gupta, who owns a private bottling company pointed out that 90% of LPG distributed is for domestic purposes. “Even if the government retains the 5% tax slab across public and private firms, it will still be able to earn more revenue than the pre-GST days,” he said.
After having reached out to several officials, these companies now only hope that the government would respond to their queries.