“Critical mineral recyclers want the goods and services tax (GST) on metal scrap to be slashed to 5 percent from 18 percent, as the government looks to strengthen India’s recycling ecosystem.
The industry also wants the Pre-Shipment Inspection Certificate (PSIC) framework on scrap imports abolished.
Talking to media, coal and mines minister G Kishan Reddy said the government will hold separate inter-ministerial meetings to address issues raised by the recycling industry, including those related to the PSIC, taxation and scrap imports.
“This doesn’t pertain to just the ministry of mines. We will hold inter-ministerial consultations on the issues,” Reddy said.
The consultations are expected to involve the ministries of finance, commerce and industry, environment, forest and climate change and electronics and information technology, he added.”
“The recycling industry has argued that the 18 percent GST on scrap increases the working capital requirement and creates challenges for recyclers. It has sought a reduction in the rate to 5 percent to make formal recycling more viable.
Raised concerns over the PSIC requirement, recyclers said its removal will simplify the import process. Overseas physical inspection and documentation are time-consuming, leading to delays in delivery and consignments getting stuck at ports, it said.
It has proposed replacing the system with technology-driven scanning and radiation monitoring at designated Indian ports, where the existing infrastructure can be used.
The Material Recycling Association of India (MRAI) said overseas inspection and documentation costs about $200 a container, adding to costs.
A Pre-Shipment Inspection Certificate is issued by an authorised inspection agency after examining imported metal scrap. The requirement comes under the Directorate General of Foreign Trade (DGFT), under the commerce and industry ministry, and is intended to ensure that imported scrap does not contain radioactive or other prohibited materials.
The government is seeking to build domestic capacity for recovering critical minerals from secondary sources, as India remains dependent on imports for several minerals and materials used in clean energy, electronics and electric vehicles.
The ministry is implementing a Rs 1,500-crore Incentive Scheme for Promotion of Critical Mineral Recycling. It provides financial support for recycling critical minerals from lithium-ion battery scrap, e-waste and other industrial scrap.
The government has approved 58 companies as eligible under the scheme, with these entities having pledged around 850 KTPA of recycling capacity and Rs 5,000 crore of investment.”
