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Double-tax threat: Ragpickers may soon go extinct in Kochi

With the Union Government deciding to hike the GST rates for plastic, paper and iron materials to 18 per cent, the scrap dealers have no other option but to look at an alternative business.

Published: 27th August 2019 01:42 AM  |   Last Updated: 27th August 2019 01:20 PM   |  A+A-

Aminul, a rag picker from Moorshidabad, Kolkata, collecting scraps in Kochi

Aminul, a rag picker from Moorshidabad, Kolkata, collecting scraps in Kochi. (Photo | A Sanesh, EPS)

Express News Service

KOCHI: The migrant labourers who turn up at your homes to pick up waste materials and scrap will be a memory soon. With the Union Government deciding to hike the GST rates for plastic, paper and iron materials to 18 per cent, the scrap dealers have no other option but to look at an alternative business.

“It is sheer injustice to levy double tax on the same product. Even after applying GST rates, the government is levying a separate tax on these products. Precisely, we are paying 36 per cent for the same product,” said PM Muhammed Harshad, patron, Kerala Scrap Merchants Association (KSMA). 

Left with no option, the association has organised a protest in the first week of July but it hasn’t yielded any results. “With the expected outcome, many of our members have started to leave the profession,” he said. 

Around 1,48,070 rag pickers are working under 12,340 scrap merchants in the state. Plus,1,97,440 loading and unloading workers are directly employed by the industry. With the crisis, many migrant labourers are disposed of the profession for greener pastures.   

Earlier, materials like plastic have zero tax and paper and iron cost much lesser than what it is now. With the enaction of GST, all of these products were raised to 18 per cent tax bracket. “We have met the finance minister Thomas Isaac last year to reduce the tax levied on these products. Though he reduced the tax on plastic to five per cent, recycled products like granules from the waste materials still have 18 per cent tax. The change badly affects in the sale of such products,” he said.  

Before the GST era, a kilo of paper cost Rs 12, plastic cost Rs. 20 and iron had Rs. 24. “Around 90 per cent of non-bio wastes are managed by us. Now, all these materials are down to price range up to 15. With the dip in business, our main feeders such as rag pickers are being forced to leave the business. If the backbone of the industry is gone, what is the point in continuing the business,” asked Harshad.

Despite handling the 20 per cent of the total non-bio waste generation of state, the industry alleges a second class citizen approach from the government. “Around 200 tonnes of plastic and 280 tonnes of paper and iron are being exported daily from the state. When plastic and paper mainly goes to Mysuru and Coimbatore, the major part of iron materials is taken by the industrialists within the state. With the increased tax rates and import of similar materials from foreign countries, many of these firms have stopped taking the materials,” he added.



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