IRPTA: 2.5 percent custom duty on RCP will further increase input cost by Rs. 500-1000 per MT

IRPTA: 2.5 percent custom duty on RCP will further increase input cost by Rs. 500-1000 per MT

-Increased customs duty on RCP will spike input cost of paper mills

New Delhi | 3rd February 2022 | The Pulp and Paper Times:

In the Union Budget for 2022-23, the government has also proposed to bring import of recovered (waste and scrap) paper for manufacturing paper, paperboard or newsprint under Basic Custom Duty (BCD). It will now attract to 2.5% duty.

On this move, Indian Recovered Paper Traders Association (IRPTA) has raised its concern anticipating that increased custom duty on recovered paper (RCP) will further fuel input cost of Indian paper mills. IRPTA assumes that this spike in RCP price will impact the price of end products.

This will have a negative impact on the Paper Industry and economy at large. India is a Fibre deficit country and hence to import RCP in India is must to meet out it's paper mill's demand

Talking to The Pulp and Paper Times, Mr. Naresh Singhal, President – IRPTA says, “cost of Imported RCP is already high and the increase by 2.5% will further increase input cost by Rs. 500-1000 per MT. An increase in Import RCP price will further increase price of domestic RCP thereby burdening the RCP recycling  mills,”

BCD on recovered (waste and scrap) paper or paperboard imported for manufacture of paper, paperboard or newsprint (falling under sub-heading 4707) is being increased from Nil to 2.5 % by amending S. No. 292 of notification no. 50/2017-Customs [S. No.77 of notification No. 02/2022-Customs dated 1st February 2022 refers]. This is being made effective from 2nd February, 2022.

                     

“Prices of Finished Recycled Paper will increase resulting in a cost increase for packaging grades and newsprint and thereby increase in cost for consumer and increase in inflation,” he added.

Mr. Singhal said, “Most RCP mill users are MSME and their product would be less competitive compared to A grade mills using wood and agro residue. Export of paper and Forex revenues will be affected since other South East Asian countries will be more competitive.”

Indian Paper Manufacturers Association (IPMA)’s President Mr. A S Mehta also shows his concern over custom duty imposition on waste paper, “However, an increase in the basic customs duty on recovered paper / wastepaper, an important raw material used by the Paper Industry, from nil to 2.5% has come as a dampener.

He said that the industry is passing through challenging times and is hard pressed for raw materials in view of supply side constraints. Increase in duty on wastepaper will add to the production cost. Since the domestic paper recovery rate in India is around only 40% as compared to over 70% in developed countries, import of recovered paper / wastepaper is necessitated for domestic value addition to meet the growing demand for paper in the country. Any imposition of import duty on recovered paper / wastepaper is not justified till the time that the collection and recovery of wastepaper in the country does not increase significantly through efforts by all stakeholders.

Web Title: IRPTA 2 5 percent custom duty on RCP will further increase input cost by Rs 500 1000 per MT