The plastic industry bodies, such as AIPMA, TAAPMA, and IPI, have strongly urged the government to lower the GST rate for plastics used in the food packaging industry. They believe that this measure would support the growth of the plastic industry, as major sectors like FMCG and food have a direct link to the public. Currently, the high GST rate of 18 per cent on these items is causing a setback to these industries’ growth due to increased product prices resulting from packaging costs. Anil Reddy Vennam, National President of the Indian Plastics Institute and Vice President-South of AIPMA, mentioned how curd, a common consumable, became more expensive with the 18 per cent GST imposed on packaging.
Plastic Industry Bodies AIPMA, TAAPMA, IPI Urges GST Reduction
During the HIPLEX exhibition, attended by members of the plastic industry, it was highlighted that the industry experienced consistent growth of 8 per cent from 2014 to 2022, except for the pandemic years 2020 and 2021. Currently, plastic consumption has reached 18 million tonnes, a significant increase from 9 million tonnes a decade ago. Approximately 40 per cent of all polymers are used in packaging and related items, directly tied to disposable income and population growth.
Anil Reddy shared valuable insights about the plastic consumption in India, China, and the USA. While India’s per capita plastic consumption is at 11 kg, China’s is 46 kg, and the USA’s is at a staggering 170 kg, with the world average being 28 kg per capita. The packaging industry is a significant contributor, accounting for 52% of plastic consumption and growing at a rate of 6% annually.
To address environmental concerns and improve waste management, the government, along with PCBs, has taken the initiative of waste management and promoting the use of recycled plastic (RP) materials in various applications. Currently, only 30% of the 3.5 million tonnes of plastic generated in India is reprocessed, making India the second-largest contributor of plastic waste to the oceans after the USA.
While the industry is making efforts to control plastic waste, the 18% GST on RP materials/products hinders its adoption in packaging due to the time-consuming and laborious collection and processing of RP materials. To encourage the industry to use RP more regularly, Anil Reddy and the plastic industry bodies (AIPMA, TAAPMA, and IPI) urge the government to reduce GST on RP and make its usage mandatory in critical applications.
During the HIPLEX exhibition, the plastic industry bodies plan to request all associations to support this two-point agenda and submit representations to the government to promote the increased use of plastics in critical growth sectors.
The requested actions are:
- Lowering GST on plastic products used in food packaging, including both rigid and flexible packaging materials.
- Lowering GST on the plastic waste management industry and making it compulsory to use Recycled Plastic (RP) in all products, depending on the criticality of their applications.
- Ensuring the protection of the plastic industry and making sure all stakeholders adhere to statutory requirements for the benefit of society.