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GST Hits Aluminium Recycling Units

Jan 29,2019

It is reported that aluminium recycling industry which has been flourishing for 6 decades in this historical city is losing its shine leaving thousands of people jobless. Industry owners are blaming the replacement of excise with GST for the crisis. Kilaparthi Srinivas Owner of a recycling unit said that “Earlier we used to pay central excise tax despite experiencing losses. But since the introduction of GST, the aluminium recycling industry is forced to pay 18% tax for scrap material and 12% tax for new material.”


The increased tax burden forced many units in and around Rajamahendravaram to close. The recycling industry provides employment directly or indirectly to around 2,500 people. Industry sources say the industry cannot survive without subsidies or tax sops from the government.


Mr. Srinivas said that there are at about 30 recycling units are functioning in the city with a monthly production capacity of 10 to 15 metric tonnes a month and annual business turnover of around Rs 40 lakh.


Aluminium units in the city use aluminium scrap as raw material and manufacture glasses, tumblers, plates, buckets, spoons, etc., According to Mr. Srinivas, first the scrap will be melted and cast into small thick pads in various sizes. Then the pads are molded into various products. The industry owners purchase aluminium scrap for INR 90 per kg.


The poor and middle-class people purchase utensils made of aluminium which is also called ‘poor man's silver’ since they cost less, lightweight, but also heat up quickly and easy to carry.”