Indian metal recycling industry seeks removal of duties

The metal recycling industry of India has urged the government for exemption on Special Additional Duty (SAD) and removal of basic import duty on inbound shipments of ferrous and non-ferrous scrap to give a boost to the sector.

The industry recycles aluminium among other metals mainly from automotive, power, infrastructure, construction and white goods industry. It is set to register an annual growth of 11.4 per cent by 2020, industry body Metal Recycling Association of India (MRAI) said in a statement. Considering the growth potential of the industry, the sector needs policy intervention from the government, it added.

Pre-Shipment Inspection Certification (PSIC) is one such area where the trade body wants the government to streamline pre-shipment inspection procedures, MRAI President Sanjay Mehta said.

Besides, the industry body also wants removal of inconsistencies in customs and evaluation of pricing in scrap imports, same duty structure for the entire countries at various ports and constitution of a regulatory body to control and monitor shipping lines, he added.

The industry said SAD of 4 per cent should be exempted for the recycling sector as it adds to the tax burden that is passed as CENVAT credit which remains unused. It is also demanding removal of basic customs duty levied on imports of ferrous and non-ferrous scrap as domestic manufacturers stand to lose market share versus other emerging countries due to higher import tariff on metal scrap.

Besides, FTAs with partner countries need to be corrected to avoid inverted duty structure as raw materials cost higher than imported semi/finished metal products, it added.

India's annual scrap consumption is INR 75,000 crore (20.40 million tonnes). It imports 6.48 million tonnes of scrap at an estimated value of INR 39,000 crore, and is the world's third largest importer of scrap. With a CAGR of 11.4 per cent, the sector is poised to take consumption to 30.03 million tonnes by 2020.

However, India's recycling rate is less than 20 per cent, while the world over recycling has been accepted as a sustainable business model yielding higher revenues as well as saving the environment and energy.