Govt decides to limit LPG subsidy for tax payers earning over Rs 10 lakh............

Govt decides to limit LPG subsidy for tax payers earning over Rs 10 lakh

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.

"The government has decided that the benefit of the LPG subsidy will not be available for consumers if the consumer or his/her spouse had taxable income of more than Rs 10,00,000/- during the previous financial year computed as per the Income Tax Act, 1961,” the Petroleum ministry said while addressing to various media organisations.

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.

This year, in April, PM Narendra Modi's LPG subsidy campaign-- 'give it up'- to exhort the better off sections of society to forego their LPG subsidy that can be utilised in providing subsidised LPG connections to the poor.

Urging the well-off to give up their LPG subsidy, he said "gas cylinders surrendered by them would be transferred to the poor who use wood for cooking. If one crore people give up their LPG subsidy, one crore poor people will benefit as they will be given new LPG cylinders instead.