Steel sector urges govt to stop penalising genuine bizmen for third party GST defaults
November 29, 2025
Ikramudin / Ludhiana
Secondary steel producers have raised serious concerns over what they describe as growing harassment due to GST mismatches and retrospective actions by tax authorities. Speaking on behalf of the industry in a meeting held today (November 29) K.K. Garg (President), Dev Gupta (General Secretary), and Sandeep Jain (Senior Vice President) of the Induction Furnace Association of North India said that manufacturers are being forced to pay GST twice on genuine scrap purchases.
The office-bearers said steel units buy scrap through fully documented transactions, including valid e-way bills, e-invoices, lorry receipts, toll receipts and even photographs of scrap-loaded vehicles with driver and truck details. Payments, including GST, are made through legal banking channels. Despite this, manufacturers face uncertainty over whether suppliers actually deposit the GST with the government.
Prominent industry leaders including Rajneesh Ahuja , president Apex Chamber of Commerce and Industry, Upkar Singh Ahuja, president Chamber of Industrial and Commercial Understakings (CICU), Narinder Bhamra, president Fasteners Manufacturers Association of India (FMAI), Gurmeet Singh Kular president Federation of Industrial and Commercial Organisations (FICO) were also present in this meeting.
According to businessmen, the problem surfaces months or even years later, when the tax department declares a supplier a defaulter or cancels their GST registration from a back date, turning genuine transactions into alleged bogus billing. The department then issues show-cause notices to buyers, demanding repayment of GST already paid along with interest and penalties.
They stressed that manufacturers have no control over whether a supplier deposits the tax, especially when GST registration is issued by the department itself. Buyers also verify GST filings on the portal at the time of purchase, yet still face liabilities later. “This amounts to paying GST twice on the same transaction,” the office-bearers said.
Industrialists warned that heavy pre-deposits required for appeals block working capital, leading to loan defaults, possible shutdowns and large-scale unemployment in the steel sector.
Bizmen demanded that finance Ministry should reduce GST on MS scrap from 18% to 5%, arguing that although the rate cut appears to reduce revenue, it would actually curb leakages and increase compliance.
They also said the current 18% tax often does not reach the exchequer, whereas under a 5% rate, the remaining 13% could be deposited directly by the industry in the same month, ensuring full revenue to the government.
While calling for an end to penalising genuine buyers with valid documents, the Association leaders emphasised that they fully support strict action against those involved in fraudulent or bogus billing.
Steel Industry GST On MS Scrap Bogus Billing Double GST Burden Secondary Steel Producers Tax Compliance Issue Scrap GST 5 Demand GST Fraud Concerns
Recommended Posts
Latest
The News Feed
Most Visited Stories
