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IAC seeks rationalisation of GST slabs on industrial, commercial, auto LPG
Sep-03-2025

Ahead of the GST Council meeting, Indian Auto LPG Coalition (IAC), the nodal body promoting clean fuel alternatives in India, has sought rationalisation of GST slabs for industrial LPG, commercial LPG, auto LPG, and LPG retrofitment kits, to help promote LPG as a fuel. The appeal comes in response to the government's latest move to streamline GST classifications and aims to address long-standing concerns of sectoral disparity. 

IAC said while domestic LPG is taxed at 5 per cent, its industrial, commercial, and automotive counterparts continue to attract higher GST rates - 18 per cent for fuel and up to 28 per cent for conversion kits. It said this discrepancy not only encourages illegal diversion of the product from domestic to commercial, but also imposes an undue burden on small businesses and MSMEs, including those in food services and agriculture, but also discourages adoption of clean fuels for commercial and transportation uses.

IAC highlighted that an equitable 5 per cent GST for all LPG segments would not only align with global best practices but also eliminate market distortion, foster safer industry growth, and advance India's net zero carbon emission goals. The existing imbalance risks driving users toward more polluting alternatives, undermining health and sustainability commitments.


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