Paper industry worried about GST hike on paper bags, cartons and boxes

The GST Council, at its 45th meeting held on Friday, September 17, 2021, recommended an increase in the rate of the GST on cartons, boxes, bags, paper packaging, etc. from 12% to 18%. The move will discourage consumers’ weaning from single-use plastic, the Paper Manufacturers Association of India (IPMA) said.

In a press briefing, IPMA raised concerns about increasing GST rates on paper bags, cartons, boxes and other packaging media which the association says will make it costly to consumers are moving away from single-use plastics.

According to IPMA, this recommendation from the GST Council is “surprising” and “out of step with the government’s decision to ban the use of single-use plastic”.

Recognizing the global threat of single-use plastic that is not biodegradable, India had previously committed internationally to ban all single-use plastics by 2022. Last month, with this in mind, the Indian government amended the plastic waste management rules prohibiting the manufacture, sale and use of several single-use plastic products from July 1, 2022; and also prohibits the use of plastic carrier bags less than 75 microns thick as of September 30, 2021 and 120 microns as of December 31, 2022.

IPMA President AS Mehta said that paper is one of the most environmentally friendly products because it is fully biodegradable, recyclable and is produced from renewable and sustainable sources. Paper offers a viable alternative to single-use plastic in several applications. An increase in the rate of the GST on cartons, boxes and paper bags goes against the government’s efforts to phase out the use of single-use plastic, he said.

Meanwhile, a CEO of a printing company in Bangalore spoke to Print week on condition of anonymity. He said: “The print is not just used by businesses that are not afraid to pay a GST rate, because they are claiming it as ITC. The final payer of the GST is the final customer who is really the aam aadmi. Raising taxes not only hits them directly, but also prompts them to look for ways to avoid paying such a high tax rate. ”

The CEO said: “Imagine a poor father who wants to marry his daughter – now he has to pay an 18% tax on wedding cards and wedding invitations he wants to print. A student who wants to get a copy of a printed textbook – now has to pay 18% tax on the book she needs for her studies A housewife who has started a small business to support her family and increase her family income has to pay 18% d tax on the leaflets, leaflets and labels it must print to advertise and brand its products. ” The CEO argued that the list of people who will be affected is endless.

The CEO said, “Raising taxes may be the easiest way to resolve the confusion, but it’s not well thought out and it’s not the right way. The government is forcing taxpayers and honest consumers to find unscrupulous petty traders and vendors who will do business without a bill and avoid taxes. These traders being small are not targeted by the government because individually they are not worth their time. Collectively, these small traders end up hurting mid-sized businesses (like us) who individually and collectively are important tax collectors for the government. ”

The CEO concluded: “Please note that we mid-sized companies are tax collectors. our own funds. We are the visible face of government and we are the ones most harassed and affected by the actions of government.

Meanwhile, some members of the industry have praised the move. Tushar Dhote of DOT in Mumbai tweeted: “With the latest recommendations, at least the confusion over GSN number and tariffs will finally go away.” Dhote added, “I know of small business printers who charge an 18% flat rate on any printed material, especially printers who only do labor-intensive jobs.”

Print week seen:
Simplification bodes well. That said, the costs of ink on paper will increase, as IPMA indicates. The age-old question remains: who will foot the bill for printing?

Ethel J. Montes