Punjab’s furnace industry has petitioned the state and federal finance ministers to reduce the GST on scrap from 18% to 5%. Businessmen assert that this would halt the harassment of legitimate businessmen and put a complete end to the fraudulent invoicing and tax evasion of several thousand crores that are being carried out by fraudsters.
Dev Gupta, general secretary of the Induction Furnace Association of North India, commented on the matter, saying: Real businessmen, especially those involved in the furnace business, are having restless nights due to the challenges being generated by false billing. Scrap is a valuable commodity for con artists to operate a bogus invoicing scheme and defraud the exchequer due to the high GST rate of 18%.
Even if they do not engage in tax avoidance, many honest businessmen become caught in this vicious cycle. In order to safeguard our sector, we thus implore the finance ministers of the federal and state governments to cut the GST on scrap from 18% to 5%.
We have asked the ministers to debate this matter in open session at the forthcoming GST Council meeting on February 18, Gupta continued. We are convinced that everyone would agree to lower the GST rate on junk since doing so will actually raise government income by putting a stop to false billing.
The reduction of the GST on scrap to 5%, in the words of Vaishno Gupta, president of the Furnace and Allied Industries Association, would be nothing short of a surgical blow to the fraudulent invoicing and tax evasion malpractices in the country.
Criminals hijack GST worth thousands of crores of rupees each year through false billing; however, if the tax rate is lowered to the lowest slab, they will no longer be able to do so. We implore the GST council to take note of this problem and swiftly lower the GST on scrap to 5%.
