Tax on recycled plastic proposed; industry criticises government

the Union government recently proposed a tax on recycled plastic that might put an end to the livelihood of hundreds of rag pickers and small-scale plastic recyclers in the country.

Industry representatives have criticised the imposition of a 16 per cent excise duty and a two per cent education cess, calling it a death knell on a sector heavily dominated by small-scale players. "Only 5 per cent of the industry is in large sized units," says G Sankaran, president, Chennai Plastic Manufacturers and Merchants Association.

Majority of plastic recycling units are located in Delhi, Madhya Pradesh and Tamil Nadu, which alone has about 500-600 units alone. "Since 1998 we have been exempted from excise duty," said Sankaran. However, this year's budget removed recycled plastic from the exemption list as the goverment felt it was losing out a huge amount of money (Rs 1,60,000 crore) due to exemptions.

Almost 80 per cent of the raw material for recycling is sourced from rag-pickers and house-to-house collection done by small players. At present, recyclers buy plastic scrap at Rs 10 per kg but with the new tax it will not be possible to pay even that, claims the industry.

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