The GST Council’s anticipated GST 2.0 reforms are focusing on structural simplification rather than sweeping rate changes for the plastics sector. Key proposed changes include rationalisation of the classification system to reduce disputes over product categorisation, streamlining of input tax credit rules, and simplification of return filing for small manufacturers.
Plastic processors have long struggled with complex GST classifications, particularly for composite products and specialty materials that span multiple rate categories. The proposed simplified slab structure and clearer product definitions are expected to reduce litigation, compliance costs, and working capital blockages from disputed input tax credits.
Industry associations broadly welcome the reform direction but continue to advocate for a reduction in GST rates on recycled plastic materials and bioplastics to incentivise sustainable manufacturing. The council is expected to announce specific measures for the plastics sector as part of the broader GST 2.0 rollout.
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