Ever felt the weight of a metal scrap in your hands and wondered about its journey? Imagine, for a moment, the immense potential these discarded pieces hold. Now, picture the labyrinthine maze of India’s fragmented scrap collection system. It’s a system riddled with complexities, where many, lost in the intricacies of GST, find themselves ensnared in non-compliance or, worse, tax evasion.
Ashish Bansal, Director of the Material Recycling Association of India (MRAI), stands at the forefront of a crucial battle. His mission? To convince the Central Government and GST Council to lower the GST rate for metal scrap materials to a low single-digit or, ideally, make it nil.
“Why should we, as a nation, burden an industry that holds the keys to our sustainable future?” Bansal asks, his voice tinged with passion. “A lower GST rate will not only enhance compliance but also significantly boost our revenues. Imagine the transformation as more players join the organized sector, adhering to norms and contributing to tax collections.”
The current scenario is far from ideal. With the unorganized segment constituting 30-40% of the metal scrap recycling industry, the convoluted GST mechanism becomes a stumbling block. Compliance feels like deciphering an ancient, cryptic text, leading to widespread evasion.
The MRAI’s proposal also includes a ‘reverse charge mechanism’. This shifts the tax liability to buyers or manufacturers, curbing fraudulent input tax credit claims by scrap dealers. It’s a strategic move, akin to playing a well-thought-out chess game where each step counters potential pitfalls.
The government’s consideration of this plea marks a beacon of hope. Should they heed the call, the recycling industry could witness a renaissance. Scrap availability would improve, processes would streamline, and the sector would evolve into a more organized entity. This shift would not only bolster compliance but also elevate environmental responsibility, significantly reducing our ecological footprint.
The Union Ministry of Environment, Forest, and Climate Change has already taken a step in this direction. They’ve mandated the use of recycled materials in battery production, setting ambitious targets for the coming years. By 2027-28, automotive and industrial batteries must contain 35% recycled materials, with an incremental increase to 40% by 2030-31. EV and portable batteries are also on a similar trajectory, starting with 5% recycled material in FY29 and increasing annually.
India’s circular economy, still in its nascent stages, is gaining momentum. Stricter regulations and mounting environmental concerns are driving this shift. But, as Bansal aptly puts it, “We’re just scratching the surface.”
The waste management industry in India is a sleeping giant. With only 30% of the 75% recyclable waste being processed, the potential is staggering. Projections suggest that the Indian recycling market, valued at $32.09 billion in 2023, could soar to $35.87 billion by 2028.
Reflecting on this, one can’t help but ask, “Isn’t it time we unlocked this potential?” The answer lies in policies that support and nurture the industry, transforming metal scrap from a symbol of waste to a beacon of sustainability.
In this narrative of transformation, every piece of metal scrap holds a story of potential, waiting to be realized. And with the right policies, we can turn these stories into a testament to India’s commitment to a sustainable future.