New 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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    New GST Rate on LPG Cylinders

    The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates on LPG cylinders based on end-use.

    User Type New GST Rate Remarks
    Domestic household 5% Subsidized or non-subsidized cylinders used for home cooking
    Commercial use 18% Hotels, restaurants, shops, eateries, industrial use

    Note: Keep “New GST Rate” in headers until official notification. Classify LPG under HSN 2711 and apply the rate by end-use.

    New GST on Domestic LPG Cylinder

    LPG Type HSN Code New GST Rate
    Domestic LPG (Subsidized) 2711 5%
    Domestic LPG (Non-subsidized) 2711 5%

    Note: Household supplies remain at the concessional slab. For inter-State supplies, the same rate applies as IGST.

    New GST on Commercial LPG Cylinder

    Commercial LPG Use New GST Rate Remarks
    Hotels, dhabas & restaurants 18% GST on full cylinder value
    Food trucks & mess kitchens 18% Small units not exempt
    Industrial heating / process 18% No concessional rate for industrial use

    Tip: If invoices bundle cylinder value with delivery/handling, determine if it is a composite supply led by LPG (then apply LPG rate).

    Summary Table: Domestic vs Commercial LPG — New GST

    Category Used For New GST Rate
    Domestic LPG Home cooking 5%
    Commercial LPG Restaurants, eateries, retail 18%
    Industrial LPG Manufacturing / process heat 18%

    Reminder: Replace “New GST Rate” with “GST Rate” once the notification is issued. Maintain classification under HSN 2711.

    Is LPG Cylinder Taxable Under Old GST?

    (Old GST Rates – Applicable Until 21st September)

    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.

    Old 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.

    Old 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 Old GST

    Category Used For GST Rate
    Domestic LPG Home cooking 5%
    Commercial LPG Restaurants, industries 18%
    Industrial LPG Manufacturing, processes 18%

    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:

    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.

    Susheel Kumar
    Chartered Accountant
    MRN No.: 096252
    City: Delhi

    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

    • 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%.