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As excise duty cuts aim to cushion oil shocks, consumer groups question why GST relief has not been extended to LPG and essential commodities amid rising inflation.
Mumbai: The government’s reduction of excise duty on petrol and diesel has sparked a serious policy debate: while relief is given on fuels, essential household items like LPG cylinders continue to face rising prices without tax relief.
This discussion has come to light following a representation by a Nagpur-based consumer activist and lawyer. Barrister Vinod Tiwari has written to the Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman. He has urged the government to rethink the tax structure amid rising inflation in the ongoing West Asia crisis.
Fuel Relief, But Is It Reaching Consumers?
The Centre has announced a cut of ₹10 per litre in central excise duty on petrol and diesel. At the same time, export duties have been imposed on diesel and aviation turbine fuel (ATF) to ensure domestic availability. The government has said this decision is meant to protect consumers from rising global prices.
However, there is a key question: Is this relief actually reaching the common man? The reduction is mainly in the ‘special additional excise duty’ paid by oil marketing companies (OMCs). Because of this, many experts believe the benefit may not be reflected directly in the prices consumers pay at petrol pumps. Critics say the move is more about sharing the burden of oil companies than directly reducing costs for consumers.
The LPG Question: Why No Relief for Households?
This is where the bigger concern comes in. While petrol and diesel have seen tax adjustments, LPG cylinders—used in almost every household—have become more expensive. Commercial cylinders have become costlier by about ₹115, while domestic cylinders have increased by around ₹65. At the same time, 18% GST applies to commercial LPG, and 5% GST to domestic LPG.
Since GST is charged on the increased base price, the tax amount also increases automatically. In simple terms, as prices rise, the government also earns more GST. T This means inflation is not just affecting consumers — it can also lead to higher tax collections
Who Is Getting Relief — And Who Is Not?
This raises a basic but important policy question. Petrol and diesel are primarily used by vehicle owners, whereas LPG is used across almost every household and commercial setup. So naturally, the question arises, why is relief being given in one sector and not the other? This is not just an economic issue — it is also a social issue.
LPG directly affects households and kitchens, especially women, who are the primary users in most families. In a country where women form a large part of the voter base and where many welfare schemes are targeted towards them, this gap becomes even more significant.
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A Practical Suggestion: How Taxes Can Be Adjusted
Bar. Vinod Tiwari has suggested a practical approach. He says that prices before the war situation should serve as the benchmark; any increase due to the global crisis should not be fully taxed; and that GST and other taxes should be temporarily adjusted. According to him, this will prevent an additional burden on consumers due to inflated prices.
The idea is simple — taxes should not increase just because prices have increased due to external factors.
Government’s Challenge: Balancing Revenue and Relief
At the same time, the government also faces its own challenges. Reducing fuel duties means a loss of revenue; any change in GST requires approval from the GST Council, which involves states, and the government has to balance inflation control with financial stability.
Yet if essential goods do not get relief, everyday people continue to bear the burden.
Political Reactions and Public Perception
The issue has also taken a political turn. Some opposition leaders have said that the fuel duty cut is being presented as major relief, but consumer prices have not fallen significantly. At the same time, higher GST from rising prices continues. This has led to a wider debate — is this real relief, or just perception management?
This is no longer just about petrol and diesel. It is about a larger policy question. Should relief be selective, or should it cover essential household needs? And most importantly, who should get priority in times of crisis? The market, or the common household? In times of crisis, policy choices define priorities — and priorities define who bears the burden.
