GST Council proposes 2% TDS on scrap deals
The proposed levy covers plastic waste, discarded tyres, electrical and electronic scrap, and used cooking oil. Under the framework, registered buyers will have to deduct TDS when purchasing from registered suppliers and pay GST under RCM on purchases from unregistered sellers, even when the latter fall below the GST registration threshold.
On Friday, the 57th GST Council unveiled proposals to introduce a 2% tax deducted at source (TDS) on specific waste and scrap transactions between registered businesses. This move aims to bolster tax compliance throughout the recycling industry. The proposed levy encompasses plastic waste, discarded tires, electrical and electronic scrap, as well as used cooking oil.
Under the new framework, registered buyers will need to deduct TDS when purchasing from registered suppliers and pay GST under the reverse charge mechanism (RCM) on acquisitions from unregistered sellers, even if those sellers fall below the GST registration threshold. The recommendations, outlined in a frequently asked questions (FAQs) document by the finance ministry, build upon the compliance framework established for metal scrap following the 54th GST Council meeting.
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