Trade body wants revisions in duties to bring LPG under uniform tax rates

With the government ready to roll out the GST regime, the Indian Auto LPG Coalition (IAC) has demanded revisions in duties to bring domestic and commercial LPG under uniform tax rates to encourage usage of environment-friendly auto LPG and prevent diversion of domestic fuel for commercial use.

Auto LPG is a highly clean automotive fuel, which is much cheaper than petrol and diesel and very comparable to CNG. A highly energy-efficient fuel, auto LPG can help reduce pollution levels in the cities.

"Currently, the duties levied on commercial LPG are much higher than domestic LPG. In fact, there is zero custom and excise duty on domestic LPG and minimal VAT, while the same are cumulatively as high as 12-15 per cent on commercial LPG. At the same time, users also enjoy a subsidy on domestic LPG cylinders. This presents several problems. Firstly, domestic LPG cylinders are often diverted for commercial use in vehicles, which is highly unsafe and allows a misuse of subsidy. Secondly, higher tax rates make auto LPG a less attractive option, when its use needs to be encouraged by all means," said Suyash Gupta, Director General of the Indian Auto LPG Coalition (IAC), in a statement.

Auto LPG emits up to 120 times less particulate emissions than diesel; 96 per cent less nitrogen dioxides (NOx) than diesel; 68 per cent less NOx than petrol and significantly lower NOx than CNG. Also, auto LPG emits about 22 per cent lower carbon dioxide (CO2) than petrol which is comparable to the CO2 emissions of CNG. At the same time, it is much cheaper than petrol and diesel and very comparable to CNG. Also, unlike CNG, Auto LPG can be easily installed on two-wheelers as well. It is to be underlined that emissions from two-wheelers are major culprits for poor urban air quality.

"Auto LPG has a series of benefits for the environment, and increasing its usage widely can have dramatic effects on the air quality of Indian cities, which are choking under the weight of carbon emissions from vehicles. The government must initiate adequate measures to promote its use. Cutting additional taxes on commercial LPG will provide a major incentive to automobile users to shift to auto LPG," adds Gupta.