Despite the ban, a majority of hoteliers are still using plastic cutlery and packaging material. Why?
The answer lies in viability in choosing plastic over any other biodegradable material.?Simply put, for hotels and restaurants, higher GST on environment-friendly material makes it unaffordable for them.
For instance, the biodegradable material -- Bagasse (pulpy fiber extracted from sugarcane juice) used for serving and parcels attracts 18% GST, and plastic, on the other hand, comes cheaper with only 5% GST.
Despite being banned, plastic automatically has become a viable option for the industry that has been struggling during the COVID pandemic. And, taxes on eco-friendly materials, the biggest stumbling block for them.
Further, the taxation is in stark contrast to the government's own policy to encourage biodegradable packaging.
The hotel associations want the government to reduce the cost of cutlery made out of bagasse by reducing GST to make its use common across the industry which is the largest consumer of such packaging material and thus put an end to use plastic and thermocol as mandated by the government itself.?
However, they are shocked over the fact that taxation on eco -friendly bagasse was very high compared to plastic.
According to them their profit margins have become thinner especially due to ongoing pandemic, rising fuel prices, and a sizable share given to food delivery aggregators leaving lesser scope for them to buy costly biodegradable cutlery.
"As a responsible industry association, we understand the damage use of plastic can cause to the environment. We support the initiatives and steps that can reduce dependency on plastics in our packaging and cutlery items. But to incentivise or enough such switchovers, we request the government to reduce the GST on biodegradable items such as bagasse from the current 18% to 5%.," said Indian Hotel & Restaurant Association (AHAR) president Shivanand Shetty.
Indiatimes spoke to restaurants owners and customers to understand the gravity of the situation.
Pratham Singh, owner of a restaurant and cafe in Delhi's Indirapuram, said that there won't be much of a change if the taxes are not reduced. "We are already struggling to survive in this highly-competitive industry and 18% tax on material is extremely expensive."
The government should either reduce it from a sizeable number or it shouldn't advocate the use of it at all. Policy makers should understand that they can't get a lot of people to use bagasse with prices so high," said Pratham.?
"It is a tough time with a pandemic looming over our heads. We are not telling them to reduce the tax a lot but they should meet us midway. The government must reduce it and bring it to maybe 10%, while also increasing tax on plastic, bringing it at par with the material to encourage its use," said Ishwar Bhalla, whose restaurant is slated to be opened in August.
He added, "They can't be environment-friendly and also think of making huge profits, all at the same time."
"Using eco-friendly biodegradable material is not just the national or state-level mandate but a global mission by all the leading nations together," said?Sneha Sharma, a customer who frequently orders food from restaurants.?
However, she urged the government to reduce taxes as it will also reduce the final cost the customers have to pay, making it a win-win situation for all the involved stakeholders.