OPPI has asked the government to remove the blanket five per cent excise duty without availing modvat that has been imposed on all plastic items. The organisation said that since the excise duty on polymers is already 25 per cent, the new imposition will have a negative impact on prices.

OPPI pointed out that manufacture of both modvatable and non-modvatable goods will be obliged to pay 25 per cent excise duty after claiming modvat on non-modvatable items. Accordingly, processors manufacturing both categories of products will find the option extremely cost prohibitive, the organisation said.

OPPI president S V Kabra said that such a serious anomaly needs to be rectified. He further said that modvat credit paid on inputs received by manufacturers has been restricted to 95 per cent on paid dutyimplying that there will be an increase in input prices as well as a five per cent loss at every conversion stage in the processing chain.

Prices down the line and on finished products will definitely increase as a result of this, Kabra added.