Indian Copper Producers Seek GST Cut Amid Record Prices

India's primary copper producers are pushing for a reduction in the Goods and Services Tax on various copper products from 18% to 5%, citing record metal prices that have tied up working capital across the industry.

The Indian Primary Copper Producers Association is in talks with the government to implement this change, which could unlock around $3.6 billion of capital currently held up in tax payments, according to Rohit Pathak, President of the association.

Copper prices have been at record highs this year, reaching over $14,700 a ton on the London Metal Exchange this month, and this surge is causing significant cost pressures in India, particularly since the 2018 shutdown of Vedanta Ltd.'s Sterlite smelter led to a reliance on imports.

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.