Copper Producers Seek GST Cut Amid Working Capital Pressures

India's copper producers are seeking a reduction in the Goods and Services Tax (GST) on copper products, citing working capital pressures due to elevated prices and long processing cycles. The industry is requesting a GST cut from 18% to 5%, which would ease working capital constraints and allow for more raw material purchases and operating expenses.

Copper producers, including Hindalco Industries and Vedanta Ltd, have committed Rs. 440 billion in capital expenditure by 2030, which could create around 45,000 jobs. However, the current GST rate immobilizes working capital during a four- to five-month processing cycle, leaving limited room for other expenses.

India's copper imports are projected to rise 4% to 1.2 million metric tons in fiscal 2025, with demand expected to reach 3-3.3 million metric tons by 2030 and up to 9.8 million by 2047. The industry group has asked the GST Council to reconsider the tax rate, which would help alleviate working capital pressures.