A high rate of GST destroys aluminium recycling units, says industry

The Goods and Services Tax (GST), even after being introduced eight months ago, is still stirring a storm among businessmen from all industries, including aluminium. A high rate of the tax, with no provision for refund, has been persistently threatening to demote the aluminium recycling industry, a majority of which are MSMEs, reported by the representatives on Saturday.

“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, an official body of aluminium recycling industry that depends largely on imported metal scrap.

Mr. Shah further commented that since 18 per cent GST is causing numerous problems to the aluminium recycling industry, the figure should be reduced to 5 per cent, like on other kinds of scrap.

Shah believes that the reduction of GST to 5 per cent on metal scrap will lead to no accumulation and thus, will not incur any revenue loss to the government. This shall further help the industry to survive and also encourage the government to get GST on finished products, added by Mahendra Shah.

In the same context, as published by the Directorate General of Valuation, the past president of the association, Kishore Rajpurohit voiced that owing to the Customs assessment being done on the basis of an alert; extra duty was paid on the import of aluminium scrap. GST on ocean freight on imports and on intermediary services are acting as double taxation, which in turn is massively hurting the industry, Rajpurohit said, adding that the custom duty should instead be assessed at transaction value as per section 14 of the Customs Act, 1962.