New Delhi, March 22 : With the Goods and Services Tax (GST) slated for implementation from July 1, the Indian Auto LPG Coalition (IAC) has urged rationalisation in duties of domestic and commercial liquefied petroleum gas (LPG) to encourage use of environment-friendly auto LPG and prevent diversion of domestic fuel for commercial use.
IAC in a statement here said the duties levied on commercial LPG are much higher than domestic LPG.
"Currently, there is zero custom and excise duty on domestic LPG and minimal value added tax (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," the statement said.
"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," it added.
According to the association, auto LPG emits up to 120 times lesser particulate emissions than diesel vehicles, 96 per cent lesser nitrogen dioxides (NOx) than diesel, 68 per cent lesser NOx than petrol and significantly lower NOx than CNG (compressed natural gas).
Besides, auto LPG emits about 22 per cent lower carbon dioxide than petrol.
"At the same time, it is much cheaper than petrol or diesel and very comparable to CNG, and can be easily installed on two-wheelers as well," IAC said.
Cutting additional taxes on commercial LPG will provide a major incentive to automobile users to shift to auto LPG," said IAC Director General Suyash Gupta.
The use of LPG as an automotive fuel became legal in India from April 24, 2000. Since then, more than 500 cities have been covered by Auto LPG with more than 1,100 stations, the industry body said.
