Indian authorities have initiated a comprehensive audit of scrap traders suspected of evading goods and services tax (GST), targeting the secondary metals industry with surprise inspections and document verification. The State GST Department (SGST) has dispatched inspection teams to various locations, examining transport records, physical inventories, and toll data to uncover fraudulent practices. Intelligence reports suggest widespread misuse of input tax credit (ITC), with claims being made despite the absence of actual scrap movement.
Traders operating informal collection points with scant documentation are expected to bear the brunt of the crackdown, as legitimate businesses call attention to long-standing market distortions caused by shadow operations. One Mumbai-based trader welcomed the move, describing it as overdue and vital for restoring fair competition.
The SGST intends to expand inspection efforts in the coming weeks, reinforcing the government’s commitment to cleaning up the sector ahead of ambitious production goals. India plans to raise scrap’s share in metal production from 15% to 50% by 2047, significantly increasing demand. With domestic scrap collection at 25 million tons and imports already supplying a quarter of demand—9.39 million tons in 2024 alone—the import volume may double to meet future targets, driving further scrutiny of supply chains.
