In response to a Rajya Sabha question on GST revenue and compliance in the recycling sector, the Ministry of Finance provided data on entities registered under GST for dismantling, recycling, shredding, or refurbishing of electrical, electronic, and battery waste. According to the official reply dated 19 August 2025, the number of registered entities under HSN code 8549 (electrical and electronic waste and scrap) has increased substantially over the past five years, from 396 in 2020–21 to 10,198 in 2024–25. Correspondingly, GST collections from this segment also rose, though not in a linear pattern: ₹0.32 crore in 2020–21, ₹4.61 crore in 2021–22, ₹43.48 crore in 2022–23, peaking at ₹132.24 crore in 2023–24, and slightly declining to ₹117.35 crore in 2024–25.

The government clarified that no estimation has been made regarding potential revenue loss due to the presence of informal or unregistered operators in the recycling industry. On the question of whether a lower GST rate under the Reverse Charge Mechanism might be introduced to encourage formalisation and reduce tax evasion, the Minister stated that GST rates and exemptions are decided by the GST Council, a constitutional body comprising Union and State/UT representatives. Any such policy change would therefore depend on Council recommendations.

The data indicates a growing trend of compliance and formalization in the recycling sector, though issues related to informal operators and possible incentives for expanding the tax base remain under consideration.

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
RAJYA SABHA
UNSTARRED QUESTION NO -2972

ANSWERED ON – 19.08.2025

GST REVENUE AND COMPLIANCE IN RECYCLING SECTOR

2972 SHRI TIRUCHI SIVA:

Will the Minister of Finance be pleased to state:

(a) the number of registered entities under GST engaged in dismantling, recycling, shredding or refurbishing activities in the Electrical and Electronic Waste and battery waste sectors;

(b) the amount of GST collected from the formal recycling value chain in last five years;

(c) whether Government has estimated revenue loss due to informal or unregistered operators in recycling sector and details thereof for last five years;

(d) whether Government plans to implement a lower GST rate under Reverse Charge Mechanism to promote formalisation and reduce tax avoidance for E-Waste and battery waste recycling; and

(e) if so, the expected revenue gain of such reduction due to tax base expansion?

ANSWER

THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)

(a) & (b) The details are enclosed in the Annexure.

(c) No such estimation has been done.

(d) & (e) GST rates and exemptions are prescribed on the recommendations of the GST Council which is a constitutional body consisting of representatives from both Union and State/UT Governments. Therefore, this would require recommendation of the GST Council.

Annexure

Refer to reply of part (a) and (b) of the Rajya Sabha Unstarred Question No. 2972 for answer on 19-08-2025

GST revenue and compliance in recycling sector for the last five years

(source: GSTN)

* No. of Registered Entities — No. of GSTINs reporting HSN 8549 (Electrical and electronic Waste and Scrap) in Table 12 of GST-R1 returns.

** Based on GST Returns