Gujarat Plastic body seeks tax sops

The Gujarat State Plastic Manufacturers Association (GSPMA) has submitted a proposal to the Centre requesting a reduction in the central excise duty on plastics and removal of fringe benefit tax (FBT).

The association has also joined hands with other plastic manufacturers' associations in the country requesting abolition of entry tax levied by respective state governments.

"Through this proposal, we have requested the Centre to minimise the excise duty on plastics, implement uniform value-added tax (VAT) throughout the nation, and reduce the central sales tax (CST) up to 1 per cent," said Rajiv Raval, president, GSPMA.

According to Raval, plastic manufacturers are earning lower margins due to spiralling manufacturing costs and higher taxes being currently levied by the state government.

The GSPMA has put forward the proposal along with the All India Plastics Manufacturers Association (AIPMA), Saurashtra Plastics Association (SPA) and Indian Plastics Federation (IPF) among others.

"The Indian plastic industry registered a growth of around 13 per cent this year of which Gujarat accounted for 7 per cent. Last year, 1 million tonnes of plastic was exported of which Gujarat's share was around 1.5 lakh tonnes. These figures would take a hit if the current tax policies are not modified," Shyam Tibrewala, former president, GSPMA, told Business Standard.

Although the Gujarat government does not levy entry taxes on plastics, the GSPMA has rallied behind other associations to oppose them.

"Rajasthan, Uttar Pradesh, Chhattisgarh, Madhya Pradesh and others state government have imposed entry taxes, which are not viable for plastic manufacturers. Also, the current excise duty is 16.32 per cent, which should be reduced to 8 per cent," said Jigish Doshi, another former president of GSPMA.

There are around 20,000 plastic processing units across the country with an estimated turnover of approximately Rs 25,000 crore.

"It is expected that India will be the third largest consumer of polymers by 2010 after the US and China. But for that our tax structure needs to be reviewed," added Tibrewala.

GSPMA plans to establish an R&D unit in the state for which it would seek land and funding from the government.

Through its Plastic Education Community, plans are afoot to create a better employment forum for the plastic industry as well as organising a buyers-seller meet with manufacturers across the country.