MANGALURU: Canara Plastic Manufacturers Association (CPMTA) has expressed its disappointment at the proposed Goods and Service Tax (GST) rates of 18% and 28% for plastic products. This is a big blow to the plastic industry, CPMTA maintained adding that time and again, the government has assured the stakeholders that there will be no extra burden of tax in GST than currently being paid by the industry noted
Plastic industry runs on very thin margins due to highly competitive market largely due to cheap imports from China, Nazeer said, adding that despite these issues, the micro, small and medium enterprises (MSME) sector has worked very hard over the years and achieved the quality of international standard due to sustained quality efforts. Today MSME'S are exporting more than 30% of production in highly competitive international market particularly against china.
Plastic industry serve daily necessities like packaging of food products, house ware, lunch boxes, buckets, pencil boxes, water bottles, and toys. Most plastic processors are MSME units and majority are not under excise because of low turnover or being in backward region. Most plastic products presently are being sold with VAT of 5% to 14.5% whereas GST for plastic products is proposed at 18% to 28%, Nazeer noted.
Therefore these products of necessity are likely to become 10% more expensive under GST and GST rates of 18% to 28% on plastic items will force the small manufacturers to close their manufacturing activities. This in turn will result in very large number of workforce being rendered unemployed, Nazeer said urging the union government and the empowered GST council to reduce the rates to 12% for all the plastic products and thereby save the industry.
Source: timesofindia.indiatimes.com