‘Aluminium recycling units hit by high GST’

No provision for refunds, says industry

March 17, 2018 08:35 pm | Updated 08:50 pm IST - Ahmedabad

GST on metal scrap at 18% is compounding the problem for the industry.

GST on metal scrap at 18% is compounding the problem for the industry.

A high rate of Goods and Services Tax (GST), with no provision for its refund, threatens to kill the aluminium recycling industry, a majority of which are MSMEs, said industry representatives.

“The aluminium recycling industry, which is represented by around 5,000 Micro Small and Medium Enterprises, is severely affected by the accumulation of GST due to over-valuation of imports of aluminium scrap by the customs,” said Mahendra Shah, president of the All India Non Ferrous Metal Exim Association.

Imported scrap

The All India Non Ferrous Metal Exim Association represents the aluminium recycling industry and largely depends on imported metal scrap. Gujarat accounts for about 40% of the industry, the association members said.

GST on metal scrap at 18% is compounding the problem of the industry, he said, adding that the industry had demanded that this be reduced to 5% on a par with GST on other kinds of scrap.

“Reduction of GST on metal scrap to 5% will lead to no accumulation and, at the same time, the government will not incur any revenue loss as it will not affect tax collection. The government would get GST on finished products. Reduction of GST on scrap will help the industry survive,” Shah added.

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