In what could give some hope to the metal industry that has been seeking a change in the treatment of goods and services tax (GST) on steel scrap, the GST Council is likely to deliberate on the matter in greater detail at the upcoming meet on October 7.
Sources have told CNBC-TV18 that the GST Council is likely to discuss the metal industry's request to levy GST on steel scrap on a reverse charge mechanism (RCM) basis. Currently, 18% GST is levied on steel scrap.
(Reverse charge means the liability to pay tax is on the recipient of supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply.)
As the fitment committee nominated by the GST Council has already discussed the proposal in detail, it is likely to seek more time before framing a view on whether to accept or reject the request, sources in the know of the development added.
According to aforementioned sources, the panel has observed that RCM is not feasible, however, it noted that a solution is needed to address the problems the industry faces.
The fitment committee is of the view that a sub committee is needed to look into the nuances of the industry’s proposal, they added.
The panel, therefore, decided to create a sub-committee of officers to study the issue holistically and come up with a workable solution. The sub-panel has already met on two occasions and is likely to submit its report shortly, sources said.
(Edited by : Kanishka Sarkar)
