GST on LPG Cylinder: Domestic vs Commercial Tax Rates
LPG (Liquefied Petroleum Gas) is a critical fuel in Indian households, restaurants, hotels, and industries. But did you know that GST rates differ for domestic and commercial LPG cylinders? Whether you’re using it for home cooking or running a food business, understanding the gst on LPG cylinder is key for accurate budgeting and tax compliance.
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Is LPG Cylinder Taxable Under GST?
Yes. LPG cylinders are taxed under GST (Goods and Services Tax), but the rate depends on who’s using it and how:
| User Type | GST Rate | Remarks |
|---|---|---|
| Domestic household | 5% | Subsidized and used for home cooking |
| Commercial use | 18% | Hotels, restaurants, shops, etc. |
GST on Domestic LPG Cylinder
| LPG Type | HSN Code | GST Rate |
|---|---|---|
| Domestic LPG (Subsidized) | 2711 | 5% |
| Domestic LPG (Non-subsidized) | 2711 | 5% |
Both subsidized and unsubsidized domestic cylinders are taxed at a low 5% rate, making cooking gas affordable for households.
GST on Commercial LPG Cylinder
| Commercial LPG Use | GST Rate | Remarks |
|---|---|---|
| Hotels, dhabas, and restaurants | 18% | GST charged on full cylinder value |
| Food trucks and mess kitchens | 18% | Even small units are not exempt |
| Industrial heating/process use | 18% | Applied in full, no rate reduction |
Summary Table: Domestic vs Commercial LPG GST
| Category | Used For | GST Rate |
|---|---|---|
| Domestic LPG | Home cooking | 5% |
| Commercial LPG | Restaurants, industries | 18% |
| Industrial LPG use | Manufacturing, processes | 18% |
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Input Tax Credit on Commercial LPG
If you’re using commercial LPG for:
- Restaurant kitchen
- Food processing unit
- Hotel or canteen
- Industrial heat treatment
You can claim Input Tax Credit on the 18% GST paid, provided:
- You are GST-registered
- The LPG is used for business purposes
- You maintain proper GST invoices and returns
Understanding the gst on LPG cylinder is crucial for both households and businesses. While domestic users enjoy a lower rate, commercial and industrial users must plan for the 18% GST and take advantage of Input Tax Credit (ITC) wherever applicable.
I am a Chartered Accountant with over 20 years of experience and a finance content writer. I focus on educating people about finance and taxation. I have written many blog posts on finance, taxation, trading, and investment on the BUSY website. My goal is to increase financial understanding by making complex concepts easier to grasp and to support educational programs in India.
Frequently Asked Questions (FAQs)
- What is the GST on LPG cylinder for households?It is 5%, applicable to both subsidized and non-subsidized domestic cylinders.
- What is the GST on LPG commercial cylinder?It is 18%, applicable to hotels, eateries, and industrial users.
- Can restaurants claim GST Input Credit on LPG?Yes, if they are GST-registered and use LPG for business, they can claim ITC on the 18% GST.
- Do I pay GST if I get gas subsidy from the government?Yes. GST is included in the pre-subsidy price, and the subsidy is refunded separately to the customer.
- Is there a different GST for industrial gas vs cooking gas?Yes. Cooking gas = 5% (domestic); industrial and commercial gas = 18%.
