AP Chambers Urges GST Cut on Commercial LPG for Hospitality Sector
The Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers) has called on the Union government to cut GST on commercial LPG cylinders used by the hospitality sector from 18% to 5%, warning that rising fuel costs are placing acute pressure on hotels and restaurants, particularly micro, small, and medium enterprises.
In a representation to Finance Minister Nirmala Sitharaman, the federation said the sharp rise in commercial LPG prices over recent months had undermined the sector’s financial stability and day-to-day viability.
Commercial LPG, it noted, has become one of the most significant recurring expenses for hospitality businesses. “The hospitality sector is operating under tremendous financial pressure as commercial LPG has become one of the largest recurring operational expenses for hotels and restaurants,” the chambers president Potluri Bhaskara Rao said.
The price of a 19-kg commercial LPG cylinder in Andhra Pradesh has climbed to nearly ₹3,200 following the latest revision effective May 1, 2026. Over the past four months, prices have increased cumulatively by around ₹1,500 per cylinder, the federation said.
It is estimated that a mid-sized hotel is now absorbing an additional monthly burden of roughly ₹90,000 to ₹1.5 lakh solely due to recent LPG price hikes.
AP Chambers also highlighted a tax imbalance, noting that many hotels and restaurants are taxed at 5% GST without meaningful input tax credit benefits, while commercial LPG continues to attract 18% GST. It described this as creating an “inverted tax structure” that is eroding the viability of budget and mid-range establishments, especially MSMEs.
Alongside fuel costs, rising prices of food ingredients and raw materials have pushed overall operating expenses up by nearly 25% for several businesses, it added.
Some establishments, the federation warned, are already trimming menus or reducing operational flexibility, while smaller outlets face the risk of closure under sustained cost pressures.
Emphasising the wider economic role of the sector, AP Chambers said hospitality remains a major employer and a key link in tourism, transport, food processing, logistics, and events.
It urged the Centre to extend policy support, arguing that timely intervention is necessary to safeguard jobs, sustain investment, and strengthen India’s tourism ecosystem.