India's copper producers lobby for GST rate cut amid record prices

India's copper producers have mounted a formal push for the government to lower the goods and services tax (GST) on copper and related products, arguing that the current 18% rate is hampering their ability to maintain adequate working capital in an environment of historically elevated prices.

The producers contend that reducing the GST to 5% would release significant capital currently trapped in tax obligations, with estimates suggesting the measure could free up approximately $3.6 billion across the sector. This capital, they argue, could be redirected toward operational expenses, inventory management, and expansion activities.

Record copper prices in international markets have amplified the working capital crunch for domestic producers, who face higher input costs and inventory valuations. The GST burden, calculated on these elevated commodity values, has intensified pressure on cash flows across the supply chain.

The move reflects broader industry concerns about competitiveness and operational flexibility during a period of commodity volatility. Producers assert that lower-taxed competitors in other jurisdictions have gained advantage, and that a rate reduction would level the playing field while boosting domestic production capacity.

The proposal now awaits consideration by India's tax authorities and policymakers, who must weigh revenue implications against the industry's claims of enhanced productivity and economic activity from capital release.