Kerala scraps VAT on gas cylinders

State Government has decided to scrap Value Added Tax levy on subsidised LPG cylinders, Chief Minister Oommen Chandy announced here.

This will make the cooking gas cylinder cheaper by up to Rs 50, the Chief Minister told newspersons after a meeting of the Cabinet.

The issue snowballed into a controversy in October last when Aadhaar-linked customers found that an additional Rs 26.65 was cut from the subsidy credited to their bank accounts.

This has since ballooned to between Rs 40 and 50 with the price of LPG cylinders undergoing a major upward revision and crossing the Rs 1,000-mark.

The issue had come up in the State Assembly earlier this month when the Chief Minister told the House that the Cabinet had decided not to levy VAT on the subsidy component.

He had said this in reply to a ruling coalition member who said that Aadhaar-linked consumers were losing on the subsidy amount because of tax levied on the subsidy component.

Nor had all consumers in Wayanad and Pathanamthitta, which were selected for pilot phase of the Aadhaar-linked LPG subsidy scheme, received Aadhaar cards, it was stated.

Separately, the Chief Minister announced on Sunday that the government will ensure the supply of LPG cylinders at a subsidised rate for orphanages and poor homes.

This too had figured in the Assembly wherein the Chief Minister had intervened to say that latest increase in LPG prices would not affect domestic consumers.

This was because 94 per cent of them did not use more than nine cylinders a year, the maximum limit fixed for subsidy.

But he had observed that poor homes and orphanages serving free food for the destitute would find it difficult to manage without subsidised fuel. “The government is trying to bring these institutions into the subsidy scheme,” he had said then.