<h1>High 18% GST on waste materials blocks formal trade, causes revenue loss; calls for rate cuts to boost recycling compliance</h1> A study by a research organization highlights that the current 18% GST on scrap, e-waste, plastics, and industrial by-products hampers India's circular economy by making formal transactions economically unviable for small dealers. This taxation leads to widespread informal, cash-based trade, causing significant government revenue losses estimated at Rs 65,000 crore annually, potentially rising to Rs 86,700 crore by 2035. The report recommends reducing GST rates on critical waste streams to 12%, eventually 5%, to incentivize formalization and compliance while maintaining revenue neutrality. It also advocates for integrating informal workers into social security schemes and linking GST benefits to verified recycling under Extended Producer Responsibility rules to promote transparency and environmental sustainability.