Thursday, March 31 2005 12:55 Hrs (IST) - World Time -

New Delhi: The Liquefied Petroleum Gas (LPG) distributors yesterday (Mar 30, 2005) threatened to go on strike from April 15 in case LPG is not taken out of Value Added Tax (VAT).

All India LPG distributors federation said that tax on LPG would go up to 12.5 per cent under VAT against 8 per cent in Delhi, increasing the price of a cylinder by Rs 10 to Rs 12.

Other State Governments have different sales tax rates, but they will be imposing VAT of 12.5 per cent on them, the federation said. Twenty-one States have agreed to implement VAT from next month.

Since Compressed Natural Gas (CNG) has been exempted from VAT, there was no justification of local Governments to include LPG under VAT regime," the federation said in a statement in New Delhi.

The LPG distributors are already suffering loss of sales because of pipe natural gas in metropolitan cities. Since CNG is much cheaper and not included under VAT, there will be further loss of sales to LPG distributors, the statement added.

"We are also taking up the matter of exempting LPG from VAT with the Centre. If LPG is not withdrawn from the clutches of VAT, the federation has decided to go on all India strike and stop supplies of LPG with effect from April 2005," the federation said.