Copper Producers Seek GST Cut as Record Prices Lock Up Cash

Indian copper producers are facing cash flow issues due to record metal prices. To address this problem, they are seeking a reduction in the Goods and Services Tax (GST) on copper from 18% to 5%. This tax break could unlock up to $3.6 billion of capital currently tied up in tax payments.

The Indian Primary Copper Producers Association is in talks with the government to implement this policy change. According to Rohit Pathak, President of the association, the current GST rate is locking up significant working capital that could otherwise be deployed towards industry expansion.

Copper prices have reached a series of record highs this year, climbing above $14,700 a ton on the London Metal Exchange in March. This surge is adding to cost pressures in India, which has relied heavily on imports since the 2018 shutdown of Vedanta Ltd.’s Sterlite smelter.