GST spells doom to aluminium recycle units

Rajamahendravaram: The aluminium recycling industry which has been flourishing for six decades in this historical city, is losing its sheen rendering thousands of people jobless.

Industry owners are blaming replacement of excise with GST for the crisis. “Earlier we used to pay central excise tax despite experiencing losses. But since the introduction of GST, the aluminium recycling industry is forced to pay 18 per cent tax for scrap material and 12 per cent tax for new material, said the owner of a recycling unit Kilaparthi Srinivas on Wednesday.

The increased tax burden forced many units to close in and around Rajamahendravaram. Around 2,500 people are getting employment directly or indirectly from the recycling industry. Industry sources say the industry cannot survive without government support in the form of subsidies or tax sops.

There are at about 30 recycling units are functioning in the city with a monthly production capacity of 10 to 15 metric tonnes a month and annual business turnover of around Rs 40 lakh, Srinivas told The Hans India.

Aluminium units in the city use aluminium scrap as raw material and manufacture glasses, tumblers, plates, buckets, spoons, etc., According to Srinivas, first the scrap will be melted and cast into small thick pads in various sizes. Then the pads are moulded into various products. The industry owners purchase aluminium scrap for Rs 90 per kg.

The poor and middle class people purchase utensils made of aluminium which is also called ‘poor man's silver’. “They (the poor and the middle class) prefer aluminium vessels since they cost less, light weight, but also heat up quickly and easy to carry,” he added. He said now some rich people are also purchasing aluminium material.