18% GST on Plastic Waste Should Go

It is interesting to learn that more than 70% of India’s PET plastic is collected and recycled. But non-PET plastic waste and other waste is still a big problem. The sector needs to be treated like a priority sector and GST should be brought back to 5%.

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Sachin Sharma, Founder and Director of GEM Enviro Management

Sachin Sharma left lucrative jobs at Morgan Stanley, Rabo Bank and Edelweiss to work on plastic waste recycling in 2013. An engineer and an IIM Calcutta grad, Sachin is today one of India’s leading leaders in waste management and extended producer responsibility (EPR) solutions provider. 

In a deep dive with Benedict Paramanand, Editor of SustainabilityNext, Sachin Sharma, Founder and Director of GEM Enviro Management, shares how India can solve its waste problems smartly and efficiently.

GEM Enviro Management was started with the purpose of enabling sourcing plastic waste into the recycling stream. We collected plastic waste from companies like Coca Cola, PepsiCo, and Bisleri, which they were selling to the unorganized players. Today we help them recycle their plastic waste as per the legal and management norms. We also installed nearly 40 reverse vending machines in different cities. 

Reverse Vending Machine (GEM Enviro Management Limited)

Reverse vending machine is a machine where a user can put a bottle in it and collect a coupon or a gift as an incentive. We did a lot of experimentation also with these machines and we found that it’s always better to give a cash incentive.

The plastic waste EPR regulations were introduced in 2016 and from the year 2018 the government became serious in implementing the same. Initially we worked with companies like Coca Cola and PepsiCo to fulfill their EPR requirements. Last year we collected around three lakh tons of plastic waste and looking forward to gearing up to do one million tons shortly. 

Today we work closely with 150 odd companies and help them meet their EPR needs. We also do nearly 50 awareness activities every year. We organize these programs in schools, colleges, universities, even in office space, in manufacturing organizations. 

It is not cheaper as on today. It’s about 20-25% more expensive compared to bottle made from virgin plastic. The primary reason for this is that the capacities are too low. Once the capacity increases it will become cheaper. 

Yes. In Europe and North America. They mix R- PET chips with chips from virgin plastic to make recycled plastic bottles. 

There is a lot of delay mainly because of constant policy changes. New capacities for recycled plastic are being I’m confident that the industry will meet the deadline.

Recyclers are the major beneficiaries. Since 2023, more than 1.5 million tons of EPR credits were issued. This is a big number. 

Image Credit – GEM Enviro Management Limited

We started this program to avoid plastic going into landfills and make our mother earth green. We also focus on making merchandise out of plastic made of polyester fiber – a byproduct of recycling PET bottle. 

I am happy to say that more than 70% of the PET plastic is already being collected and recycled in India – better than many developed countries. In India, hard plastic is largely collected and recycled – the kind of plastic used by soft drink companies. 

This plastic is recycled to form the recycled polyester fiber (RPSF). This is almost similar in characteristics to the normal plastic and is cheaper as compared to the normal fiber. This is used in various textile applications such as carpets and pillows. 

The government had not permitted it so far but recently the FSSI, the food quality certification body, has permitted it. Many companies have started adding infrastructure for bottles to be made from R- PET in India. The deadline for adding recycled material in packaging is 2026.

 We have about 50 employees headquartered in Delhi NCR. We work throughout the country and working with close to 150 brands. We have about 50 collection centers and more than 20 recyclers across the country where we send the material for recycling. 

The waste sector is beginning to mature with infrastructure and capital coming in. It is going to flourish in the coming years. 

GST of 18% on waste collection and recycling is huge. It was 5% before and we want that back. Because the informal sector is still big, such high GST tempts people to evade. This is a priority sector so imposing such high GST, which is equivalent to luxury products, does not make any sense. 

We want the government to invest heavily on waste collection and sorting infrastructure. There are good technologies today for recycling efficiently. 

We also need good subsidies to attract more investors in recycling.

Watch Full Interview – https://youtu.be/gLmATgkTmSs

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