No LPG subsidy for tax payers earning over 10L
Tax payers with annual income of more than Rs 10 lakh will not get subsidised cooking gas (LPG) from next month as the government on Monday decided to limit supply of under-priced fuel to cut subsidies.
Mumbai: Tax payers with annual income of more than Rs 10 lakh will not get subsidised cooking gas (LPG) from next month as the government on Monday decided to limit supply of under-priced fuel to cut subsidies.
At present, all households are entitled to get 12 cylinders of 14.2-kg each at subsidised rate of Rs 419.26, while the market price is Rs 608.
Earlier this year, Prime Minister Narendra Modi had appealed to the public at large to those who can afford LPG to voluntarily give up using subsidised LPG and instead buy cooking fuel at market price so that the subsidies can be passed on to those in dire need.
“While many consumers have given up subsidy voluntarily, it is felt that consumers in the higher income bracket should get LPG cylinders at the market price," the Petroleum ministry said while addressing various media organisations.
The government, it said, "has decided that the benefit of the LPG subsidy will not be available for LPG consumers if the consumer or his/her spouse had taxable income of more than Rs 10 lakh during the previous financial year.
So far, over 57.5 lakh LPG consumers, out of nearly 15 crore customers, have given up subsidies. This would, however, be done initially on a "self-declaration basis while booking cylinders from January 2016 onwards."
To cut the subsidy bill and reduce fiscal deficit, the previous UPA government had restricted the number of subsidised domestic cylinders per household to six every year in September 2012, revising it to nine the following January. The cap was revised in January 2014 to 12 cylinders a year, starting April 1. The subsidy for 12 cylinders in a year is transferred directly to the bank account of consumers which they use to buy LPG at market rate.
The subsidy payout on LPG in 2014-15 was Rs 40,551 crore, which this fiscal will be less than half as oil prices have slumped to a six-year low. During April-September, the subsidy outgo was Rs 8,814 crore. Currently, there are no estimates of how many LPG customers may have a taxable income of Rs 10 lakh or more.