Indian Copper Producers Seek GST Cut Amid Record Metal Prices

Indian copper producers are calling for a reduction in the Goods and Services Tax (GST) on copper to 5% from its current rate of 18%. The Indian Primary Copper Producers Association is lobbying the government to make this change, citing the impact that record metal prices have had on working capital across the supply chain.

Copper has reached a series of record highs this year, with prices climbing above $14,700 a ton on the London Metal Exchange in March. This surge has added to cost pressures in India, which relies heavily on imports following the 2018 shutdown of Vedanta Ltd.'s Sterlite smelter.

The higher working-capital requirements are being felt across the industry, including by primary copper producers such as Hindalco Industries Ltd., which operates on a roughly three-month concentrate cycle. The upfront tax is borne by primary producers purchasing feedstock for processing, as well as downstream manufacturers buying copper products.