Plastic industry bodies urge govt to lower GST on food packaging

Hyderabad Several plastic industry bodies like AIPMA, TAAPMA and IPI strongly request the government to look for lower level of GST for plastics used in food packaging Industry to support growth of plastic industry.

Major industries like FMCG, food and other allied sectors have direct link to the public. High rate of GST (18 per cent) on these items is creating a major setback to these industries growth as product prices is increasing because of packaging cost, said Anil Reddy Vennam, National President, Indian Plastics Institute, Vice President-South, AIPMA (All India Plastics Manufacturers).

Citing an example, he said: "Curd is a normal consumable product on which GST has been imposed and it became more expensive as packaging also attracts 18 per cent GST."

The plastic industry members attending this HIPLEX exhibition, which has been held after a span of eight years in a new shape front the previous version of IPLEX.

Plastic industry has grown a level of 8 per cent uniformly from 2014 to 2022 with a exception during the year 2020 and 2021 due to the pandemic across the globe. Today, we are in a consumption level of 18 million tonnes from 9 million tonnes about a decade ago.

If we see the consumption pattern of plastic as whole without differentiating the polymer – about 40 per cent of all polymers get consumed in packaging and other related items which are directly linked to disposable income and population.

"Even though we are trying to exceed population growth in comparison with China – our per capita consumption of plastic is far lower than Chinese market. Our consumption is 11 kg per capita in comparison with China per capita consumption is of 46 kg per capita and USA is at 170 kg per capita world average of 28 kg per capita.

In this polymer industry – one of the major sector is packaging industry (Rigid and Flexible) , which has major consumption of about 52 per cent of plastics and it is growing at GARG of 6 per cent," Anil Reddy informed.

To protect the environment and effective waste management, government along with PCBs has taken initiative of waste management and use of RP material in various applications. Out of 3.5 million tonnes of plastic generation in India - only 30 per cent is reprocessed and incidentally we are the second largest country in the world leaving plastic waste in to ocean after US.

Even though Industry has taken active steps and controlling the same - however having GST of 18 per cent on RP material/ products, the industry is not benefiting by using RP material in any packaging industry as collection of RP and processing of RP has more time consuming and laborious.

So from same above institutes (AIPMA, TAAPMA and IPI) – we request that Govt should consider to reduce GST on RP and make usage of RP as mandatory in various applications based on the criticality of the product. This will encourage the industry to use RP regularly as lower GST is beneficial to all stake holders.

In this HIPLEX exhibition, the plastic industry bodies request all associations to consider this two-point agenda and submit representations to the government to increase use of plastics in critical growth sector:

• Reduction of GST on plastic products used in food packaging (both rigid and flexible)

• Reduction of GST on plastic waste management Industry and making mandatory of use of RP in all products based on criticality of applications

Please protect the industry and ensure that all stake holders meet statutory requirements for benefit of the society.