Recycling industry hit by 18% GST

C Srinivasan from the Chennai Waste Collectors’ Federation said that the prices of scrap have almost gone down by half. “The dealers say that this is because the buyers are not ready to pay, since the onset of 18 per cent taxation. This was always a grey area, since many times, the dealers underpay the waste pickers. Now, with the prices falling, it is the waste pickers who are suffering,” he said, adding that unlike other cities, there is no strong collective representation of waste pickers here, which renders the impoverished community, helpless.

Chennai-based waste policy expert Dharmesh Shah said that prices have crashed, post GST. “The waste pickers used to collect these materials because it had value. PET bottles and milk packets fetched good money. Now, lots of scrap materials are not being taken by the dealers,” he said, adding that the diminishing value will prompt many buyers of scrap to invest in virgin material, thus affecting the recycling industry.

This is a negative decision, said Lakshmi Narayan, Founder, Kagad Kach Patra Kashtakari Panchayat, a Pune-based waste pickers’ trade union. “When scrap dealers choose to play with tax, it threatens to reduce rates. Apart from the 18 per cent GST, the compliance requirement results in a higher administration expense for the dealers. If the costs of certain materials have drastically dropped, the waste pickers won’t collect them. This will lead to a huge pile-up on waste and the municipal costs will go up. We are a part of a national movement, that is pressing the government to remove the GST on scrap,” she said.