LPG Gas supplied to Domestic consumer liable to GST @5% w.e.f 25.01.2018 and entire ITC@18% is eligible against purchase of LPG

May 24, 2020

Facts

  • Navbharat LPG Boling Company(Applicant) is engaged in the business of purchasing LPG Gas (Bulk) through Tanker at GST 18% and there are, refilling the same in two types of boles- 17 kgs. and 21 kgs. and sell it to Commercial Customer on Rate of GST Applicable @ 18%
  • Also, they are refilling the gas in boles of 12 kgs. and 15 kgs. also and selling it to Domestic Customers, on which GST rate applicable is @5%.

Issue before the AAR

  • Determination of the liability to pay tax on sales of Gas sold in Bole to Commercial Customer and Gas sold in Bole to Domestic Customer
  • Entire I.T.C. @ 18% eligible on Purchases of LPG Gas (bulk) through Tanker?

Discussion and Finding of AAR

  • As per Noficaon 1/2017-Central Tax(Rate), LPG appears Sr.No.165 of Schedule I wherein the GST rate is 5% (2.5% SGST + 2.5% CGST) which is available only in cases where LPG is supplied to domestic consumers or non-domestic exempted category (NDEC) customers by the Indian oil Corporation ltd., Hindustan Petroleum Corporation Ltd. or Bharat Petroleum Corporation Ltd. Consumers.
  • LPG gas received from companies other than the 3 mentioned above and supplied to Commercial/Domestic customers in cylinders of 21 kgs., 17 kgs., 15 kgs. and 12 kgs. would not be covered under the above Schedule-I but will be covered under Sr.No.453 of Schedule-III of Nonfiction No. 1/2017-Central Tax(Rate) dated 28-6-2017 (which reads as under) and would attract GST of 18% (9% SGST + 9% CGST)
  • Nonfiction 1/2017_Central tax(Rate) was amended by Noficaon No:06/2018-Central Tax (Rate)and a new Serial number 165A was inserted.
  • As per entry 165A, LPG supplied to household domestic customers would attract GST of 5% (2.5% SGST + 2.5% CGST). Hence, LPG supplied by the applicant to household domestic customers would attract GST of 5% GST with effect from 25-1-2018.
  • The applicant is eligible to take the entire input tax credit @ 18% on purchases of LPG Gas in bulk through Tanker subject to the fulfilment of the conditions/provisions (wherever applicable) for taking input tax credit as envisaged in Section-16, 17 and 18 of the CGST Act, 2017 and Rules-36, 37, 40, 41 and 42 of the CGST Rules, 2017

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