The All India Recycled Fibre & Yarn Manufacturers Association, while finalising the GST rates has requested the Union Finance Ministry to maintain the current excise duty cost advantage of recycled PSF vis-à-vis virgin PSF.

Virgin PSF manufacturers are charged 12.5 per cent excise duty, while recycled PSF attracts 2 per cent concessional excise duty, due to which spinners get the cost advantage of 10.5 per cent, and so opt to buy recycled PSF In the current tax regime.

A same uniformity in the GST regime has been requested by the finance ministry by theassociation, so that the excellent work of recycling PET bottles continues. As per the association, if the existing differential is not maintained, operations of the whole PET recycling industry will become impracticable. PSF buyers would prefer to buy virgin PSF, which would lead to closure of PET bottle recycling companies, which apart from destroying jobs, will also harm the environment, if they lose on the cost benefit.

The PET bottle recycling value chain provides direct and indirect employment to around 500,000 people. The industry has grown in the last ten years and the current production of recycled PSF is around 660,000 metric tons per annum, turnover around Rs 5,000 crores and currently recycles around 700,000 metric tons of used PET bottles.

BP Sultania, president of the All India Recycled Fibre & Yarn Manufacturers Association commented on this saying that they first have hit by the ban on import of PET bottle scrap, which led to a steep increase in prices of locally available PET bottle scrap and now if GST on recycled PSF is at parity with virgin PSF, this will make the survival of the PET bottle recycling industry very difficult.

He further added that they urge Finance Minister Arun Jaitley to consider their demands of continuing the tax cost advantage. An intervention of Textiles Minster has also been sought to convince the finance ministry to accept valid demands and thereby safeguarding and promoting the PET bottle recycling industry.