Tariff ends on waste paper

PAPER: Newsprint producers, packaging firms to benefit excise up, retail prices to rise

The Customs duty on waste paper has, from 2.5 per cent, become nil. In last year’s Union Budget, the duty was reduced from five per cent. Considering a landed price of $200 (Rs 10,000 at a rupee-dollar rate of 50) per tonne, the move will bring down raw material cost by Rs 250 per tonne.

So far, newsprint, for which waste paper is an input, was being imported duty-free, while the latter attracted duty. This anomaly has been ended.

Given that the country imports around three million tonnes of waste paper annually, the total savings should be Rs 75 crore. Due to a raw material shortage, Indian paper mills are using waste paper as the raw material for manufacture of newsprint, as well as that for kraft paper, used by the packaging industry.

The move will help newsprint producers and a host of small packaging board companies, totalling about 400 units.

With the accompanying rationalisation of excise duty, that on paper has gone up from five per cent to six per cent, which should lead to an increase in writing paper prices by around one per cent or Rs 500 per tonne, as the companies would be preparing to pass on the impact of the rise.