[Urbanstudy] GST and its impact on wastepickers

Bharati Chaturvedi bharati at chintan-india.org
Fri Jul 28 00:18:12 CDT 2017


It slipped my mind-here is my piece from Scroll.in <http://scroll.in/> on the issue, which we’ve been working on since the GST rates got announced, along with informal sector partners and others. 

https://scroll.in/article/844027/why-the-indian-government-must-rescind-gst-levied-on-scraps-of-plastic-paper-cardboard-and-glass <https://scroll.in/article/844027/why-the-indian-government-must-rescind-gst-levied-on-scraps-of-plastic-paper-cardboard-and-glass>


Will share as things move ahead. 

Cheers


Bharati Chaturvedi 
Founder and Director
Chintan Environmental Research and Action Group

C-14, Second Floor, Lajpat Nagar III, 
New Delhi – 110024, India
Tel: +91-11-46574171/72, 29842809
Fax: +91-11-46574174
Website: www.chintan-india.org
Facebook: http://on.fb.me/19Mw10Q
Twitter : bharati09



> On 28-Jul-2017, at 10:00 AM, Kabir Khan <kabirkhan1989 at gmail.com> wrote:
> 
> GST in its current form is anti-poor. It is supposed to make business easier, but that is only for the foreign investors. Goods and Service Tax in current form doesn't recognize layers of informality in Indian economy. 
> It will lead to further informalization of the economy as the tax amount is too high for many items. Both virgin plastic and scrap plastic is taxed the same, i.e. Ambani's units have to pay the same amount of tax as that of saying small recycling unit in Nayandahalli. This kind of approach is utterly stupid and economically oppressive for smaller and medium enterprises, who will prefer staying informal, paying a bribe than paying an atrocious amount of tax.
> 
> The higher taxation on items including scrap glass has destroyed the scrap markets. Glass industry which was known for its vibrant recycling is now at losses, with waste glass reaching the landfill.
> Similarly, manufacturers who use recycled materials plastic, glass or paper are passing the cost of taxation on the chain below, instead of raising the price (price rise will make recyclable material unaffordable). This is having a snowball effect with waste-pickers at the bottom paying the most for the cost of taxation. This analysis is not limited to informal waste economy.
> 
> Start with any industrial chain whether it is garments, electronics, cosmetic goods- you'll find the workers at the bottom suffering the most. In many cases, wages may go down as the cost of taxation has to be passed onto someone without increasing the price. And that someone is always a worker (or informal worker). Let's also remember that most goods in India have their raw materials sourced informally, most services are provided by informal workers. There is going to be no cascading effect, most will avoid taxation by not billing. If the billing is done, the prices need to be reduced to make it affordable and the producers or informal workers engaged in raw material production spaces like waste-picking, mining will suffer the most as they have to do more work to earn the same amount. 
> I raised these questions to the Tax officer, who was a part of GST framing team. He dismissed me as looney holding onto isolated ideas.
> 
> Modi's policies whether it is demonetization or now GST have harmed women more than men. There are gendered and ethnographic repercussions of government's economic initiatives.
> 
> 
> GST effect: Why are Delhi’s waste collectors refusing glass bottles? <http://indianexpress.com/article/delhi/gst-effect-why-are-capitals-garbage-collectors-refusing-glass-bottles-4765652/>
> Despite the obvious effect this will have on the environment, the GST affects livelihoods and families of the waste pickers — most of whom are migrants.
> 
> 
> Written by Sowmiya Ashok <http://indianexpress.com/profile/author/sowmiya-ashok/> | New Delhi | Updated: July 25, 2017 5:18 pm
>  Discarded bottles are likely to end up in a landfill. (Express Photo by Amit Mehra)
> Top News
> 
> With the resale value on glass bottles becoming minuscule after the 18 per cent tax on glass products as per GST, waste collectors, who help recycle glass, paper and plastic, and have traditionally been a key link in the city’s inadequate waste management infrastructure, have been advising people to dump bottles in the trash. The result, discarded bottles, that once contained beer, whiskey, or even lemon extracts, will likely end up in a landfill — not decomposing for centuries.
> 
> Waste collectors say that while previously a 750 ml bottle of wine would fetch them Re 1 per bottle, now, a kilo of used bottles is worth the same amount of money. “Bilkul bandh ho gaya hai,” said Mohammad Hamid Ali, a waste picker, who also collects kabaad from the NDMC area. Others say they have started to smash glass bottles into smaller pieces to sell as mixed glass, for Re 1 per kilo.
> 
> “I have started telling customers to collect bottles and keep them to sell later in the hope that rates increase,” said Ali. He claims his earnings have dipped by 40 per cent since the new tax regime has hit all products he collects: glass bottles, plastic and paper.
> 
> Despite the obvious effect this will have on the environment, the GST affects livelihoods and families of the waste pickers — most of whom are migrants. “There are 3-4 lakh informal workers in the city who are related to waste management, especially in the informal sector,” said Swati Singh Sambhyal, programme officer at Centre for Science and Environment.
> 
> To put it in perspective: 60 per cent of recycling activities in India is done in the informal sector. “Of that, five-six per cent of municipal solid waste is glass products,” said Sambhyal. “This will disrupt the informal glass recycling sector,” she said, adding that the Solid Waste Management Rules, 2016, has also indicated an intent to formalise the informal sector.
> 
> 
> The scrap market too has taken a hit. Many contractors who collect waste from smaller waste collectors claim that previously an area that was serviced by 10 people, has seen reduction by more than half. Further, many with large quantities of kabaad have been stopped by cops asking for an ‘invoice’ to be shown, which is impossible to come by.
> 
> Balmukund Kumar from NGO Chintan said, “Some may even accept glass bottles because the contractor he sells to has sufficient capital for now. But as the chain progresses, the money doesn’t filter back down,” he said.
> 
> 
> 
> Ragpickers hit hard by GST <http://www.thehindu.com/news/cities/bangalore/ragpickers-hit-hard-by-gst/article19365618.ece>
>  Mohit M Rao <http://www.thehindu.com/profile/author/Mohit-M-Rao-379/>
> Bengaluru, July 26, 2017 21:39 IST
> 
>  
> A ragpicker at the New Delhi railway station.  
> 
> Plastic recyclers protecting margins by paying less for waste plastic
> 
> As the nation ushered in the Goods and Services Tax (GST) on July 1, no one would have imagined that it might have adverse consequences for the environment. But with the tax rate on recycled plastic shooting up from 5.5% to 18% post-GST, ragpicking as a livelihood seems to be turning unviable, with attendant impact on the urban environment.
> 
> Take the case of Nagaratna and her self-help group (SHG) at Mahadevapura. Nearly a month post-GST, the Mahadevapura Mahila Okkuta, a collection of 17 SHGs that collects and segregates waste in Garudacharpalya, is staring at the prospect of their profits being wiped out.
> 
> Before GST, they had consistently made ₹30,000 as surplus. “This month it is zero,” says Nagaratna from the Okkuta. “We have been collecting and recycling waste for over 12 years now. We have never faced a situation like this. We’ve even had to cut down on the lunch we give our workers.”
> 
> After the onset of the GST, the 18% tax imposed on waste plastic has sparked a downward spiral in prices in the waste recycling markets. Plastic recyclers faced with the new tax are protecting their margins by slashing the prices at which they buy from the thousands of waste managers and ragpickers.
> 
> The price of mixed plastic has come down from ₹19 per kg to around ₹13 now. Lucrative PET bottles fetch ₹17 per kg, as against ₹22 last month; empty milk covers sell at barely ₹7 per kg, down from ₹16; glass bottles (750ml) go for 50paisa per kg, instead of the ₹1.5 per undamaged bottle. These figures were collected by The Hindufrom various waste collectors.
> 
> “We work on tiny margins, of barely ₹1.5 per kg recycled. When prices drop, our business sinks. We can only hope that this is temporary, for otherwise it would become difficult to recycle. This being an informal sector, not many have TIN (Taxpayer Identification Number). Taxes paid by the recyclers are recovered from us instead,” says Mansoor Ahmed Ghouse, who manages a dry waste collection centre where 12 workers process 2.5 tonnes of waste daily.
> 
> Similarly, Hasiru Dala, an organisation of waste workers that manages 43 such centres, says that civic workers have significantly reduced selling plastics to collection centres as the prices are “no longer lucrative.”
> 
> At Jali Mohalla, one of the largest open markets for recyclable products in the city, the lower demand for recycled products, coupled with the “sudden introduction of confusing taxes” has resulted in lower purchases of waste material.
> 
> A little higher up the recycling chain, Rasool Khan of KK Plastics, which fashions recycled waste into bitumen, says the hike in tax rates from 5.5% to 18% has made their products uncompetitive. “All we can do is cut our margins so that even with the higher tax rate, the product is sold at the same rate. I don’t understand how an environment-friendly initiative such as recycling can be taxed at this high rate,” he said.
> 
> Incidentally, the GST has hit the civic corporation too. Under the present system, it has outsourced the sweeping of streets, collection of segregated garbage from homes, and transportation of waste. All these activities have overnight become a ‘service’ under the GST regime. Considering that the corporation spends more than Rs. 400 crore on these ‘services, the 18% tax burden works out to R₹72 annually.
> 
> ++++++++++++++++++++++++++++++
> Regards
> 
> कबीर/کبیر
> 
> Phone:00-91-99028-47033
> 
> email: kabirkhan1989 at gmail.com <mailto:kabirkhan1989 at gmail.com>
> 
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