Remove anomalies in GST on plastic products: Plastindia

Even as it welcomed the GST regime, the plastics industry's apex body Plastindia Foundation today said there is a need to remove anomalies in the prescribed taxation on various day-to-day plastic products
"While we welcome GST, we urge the government to remove the anomalies in prescribed GST on various plastics items of day to day use and common man's use," Plastindia President K K Seksaria said in a statement here.
Plastics industry in recent past has been growing at an annual average growth of more than 10 per cent and is contributing significantly to the GDP growth, he said, adding the industry exported plastics worth USD 7.9 billion in FY17.

"We feel the SMEs are likely to be impacted most. Out of about more than 50,000 plastics units, over 95 per cent are in medium and small scale industries," he said.
As per decision of GST Council, items of day-to-day use were supposed to attract merit GST rate of 5 per cent or lower standard GST rate of 12 per cent.
Some of the items were supposed to be under higher standard GST rate of 18 per cent. Only luxury goods were supposed to attract 28 per cent GST rate.

"However, some of the plastics products have been kept below 12 per cent tax bracket, while a large number of plastics items have been placed in 18 per cent tax brackets while some are even being placed at highest tax bracket of 28 per cent.

"We feel this increase will not only hit SMEs but also hurt the poor and middle class and lead to increase in prices of plastics products used by them," he said.
Plastindia said items like plastics furniture, tarpaulin woven and non-woven raffia fabric, plastics for office and school supplies, PVC floorings, PE interlocking mats, vacuum flasks and other misc articles of plastics not mentioned elsewhere which are mainly used by common man have been kept under highest GST tax bracket of 28 per cent.
Plastics furniture, though light weight and low in cost but a voluminous article incurring huge transportation, storage and distribution costs, the cascading effect under GST rate of 28 per cent will be very prohibitive.

"Further, under present indirect tax regime, the Central Excise is to be paid only upto manufacturing stage but under GST tax regime the CGST impact will be right upto the end consumer," Seksaria added.