GST Hindrance in India's Waste Management: A Call for Tax Reforms
A study from the Centre for Science and Environment highlights the 18% GST on waste categories as a barrier to sustainable solid waste management in India, leading to hefty revenue losses. The informal sector's dominance results in significant GST revenue losses, urging the need for tax reforms.
- Country:
- India
According to a study by the Centre for Science and Environment (CSE), an 18% GST on crucial waste categories is obstructing sustainable waste management in India and causing revenue losses amounting to Rs 65,000 crore. The high tax rate forces small scrap dealers to operate informally, bypassing the formal tax system.
The study highlights how the informal sector, handling up to 90% of certain waste streams like e-waste and metal scrap, leads to an estimated annual GST loss of Rs 65,000 crore. If unchecked, this figure could swell to Rs 86,700 crore by 2035, overshadowing circular economy efforts.
Experts suggest reducing GST rates on metal scrap, plastics, and e-waste from 18% to 12% or even 5% to promote compliance and sustain revenue neutrality. They call for formalizing informal workers through integration into government schemes and tying GST benefits to EPR compliance to motivate recycling efforts.
(With inputs from agencies.)
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