Ludhiana: Amid reports that soon there might be changes in the GST slabs, the furnace and other allied industry once again has started raising its voice against 18% GST on scrap, demanding that it be reduced to 5%. Claiming that if GST is reduced to 5% from present 18%, the malpractice of bogus billing will immediately stop, the businessmen have sent a memorandum to the Union ministry of finance and also to the new chief minister of Punjab drawing their attention to the issue. 

Dev Gupta, general secretary of Induction Furnace Association of North India, said “The rate of 18% GST on scrap is proving to be a big problem not only for furnace industry, but for the GST departments as well. Such high rate of tax has given birth to the financial crimes like bogus billing in which fraudsters are fleecing the government by taking huge amount of ingenuine GST refunds by indulging in fake sale purchase of scrap. Due to misdeeds of such persons, the honest businessmen have to bear the brunt as their GST refunds and credits get blocked by the GST departments when their genuine purchases too sometimes reflect on goods supplied against the bills issued by these persons. The only way to resolve this problem, which is causing loss of hundreds of crores to exchequer is to reduce the GST on the scrap from 18% and keep it in the slab of 5%.”

According to Narinder Bhamra, president of Fastener Manufacturers Association, “Whether its state GST department or central GST department all out efforts are being made to curb the bogus billing nexus but unfortunately its so widespread and such large number of organised gangs are involved in this malpractice which is making the job of departments difficult. There is only one effective way to stop this menace of bogus billing, which is to reduce the rate of GST on the scrap to 5% so that there is no scope of claiming input tax credit (ITC) on the pretext of which the fraudsters are able to commit this offence. We have once again raised this issue with the Union government and also with the new chief minister of Punjab and urged them to accept our demand of reducing the GST on scrap to 5% with immidate effect.”