Promote eco-friendly packaging in India: MCMA

MUMBAI, INDIA (Commodity Online): India's Metal Container Manufacturers Association (MCMA) has urged the government to announce fiscal incentives to promote Eco-friendly packaging in the country.

Metal packaging industry is facing serious problem on accumulation of credit due to inverted duty structure and supplies to merchant exporter/manufacturer exporter against Notification 43/2001 dated 26/6/2001. The association said in a Pre-Budget Memorandum 2011-12 to the Government of India's Ministry of Finance.

According to Mr. Sanjay Bhatia President MCMA & Managing Director Hindustan Tin works Ltd "We have urgedthe government to provide fiscal incentives to promote packaging which is environmental friendly, recyclable and sustainable. These incentives can be given in terms of subsidies, refund of indirect taxes, concessional duty on import of capital goods/inputs and income tax exemption."

MCMA (a primary organization that) represents the interests of companies involved in the production of metal containers, packaging and allied components. The issues affecting metal packaging industry are provided below:

- Various food products like mango pulp, process vegetables, coffee etc. which are packed in tin containers are exported out of the country by manufacturers, export houses, traders, merchant exporters etc.

-These cans are supplied by the industry without paying excise duty under Notification 43/2001 dated 26/6/2001 as merchant exporters and their supporting manufacturers don't want to pay excise duty and claim refund. The said notification stipulates "procurement of goods without payment of duty for the purpose of use in the manufacture or processing of export goods and their exportation out of India"

-For can making industry, this results intonon utilization of CENVAT credit.

-MCMA suggests that such deemed export should be brought at par with physical export as in the latter case, the excise duty paid on packaging material is being refunded under Rule 18 of the Central Excise Rules 2002.

The recommendations by the Metal Container Manufactures Association (MCMA) to the Government in Pre Budget Memorandum 2011-12:

- Deemed export should be brought at par with physical export for the purposes of refund of excise duty in order to address the issue of CENVAT accumulation with the industry.

-Alternatively, the accumulated CENVAT credit should be allowed to be adjusted against the purchase of inputs so that excise duty should not be paid again on such inputs resulting into further accumulation of CENVAT.

- Appropriate fiscal incentives should be considered to promote packaging which is environmental friendly, recyclable and sustainable. These incentives can be given in terms of subsidies, refund of indirect taxes, concessional duty on import of capital goods/inputs and income tax exemption.