Steelmakers' Association Urged Tax Cut on Scrap Metal

The association claimed that reduction of tax will reduce the scope of tax evasion by scrap metal dealers, thus resulting in increased revenue for the government.

SEATTLE (Scrap Monster): The Himachal Pradesh Steel Industries Association has called upon the government to rationalize the Goods and Service Tax (GST) on scrap metal by reducing it from current levels of 18% to 5%. The demand was raised in separate letters written to the State Chief Minister and the Union Finance Minister.

According to the association, the government has already reduced tax on other scrap materials such as plastic, rubber, wood etc. from 18% to 5%. The same rate should be made applicable to steel scrap as well, it said. The reduction of tax would be a great relief to the troubled steelmaking sector, it added.

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The association claimed that reduction of tax will reduce the scope of tax evasion by scrap metal dealers, thus resulting in increased revenue for the government. The association also recommended other options, including levy under the reverse charge mechanism. Incidentally, several cases of fraudulent tax credits by scrap dealers were recently unveiled during a raid conducted by the GST Intelligence wing.

Meghraj Garg, President of the Association noted that erring scrap dealers tend to lead to supply disruptions, as the members have been directed not to deal with such dealers any more.

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