GST Council proposes 2% TDS on scrap dealings

The GST Council has proposed a 2% Tax Deducted at Source (TDS) on transactions involving scrap materials. The levy is designed to cover plastic waste, discarded tyres, electrical and electronic waste, and used cooking oil.

Under the proposed framework, registered buyers will be required to deduct TDS when purchasing from registered suppliers. For purchases from unregistered sellers, registered buyers must pay GST under the Reverse Charge Mechanism (RCM), even when the unregistered seller falls below the GST registration threshold.

The move aims to formalise the scrap trade and improve tax compliance in the sector.