<h1>GST gaps in scrap recycling expose formal recyclers to fraud risk; reverse charge or lower rates could stabilize revenues</h1> A study finds significant GST non-collection in informal recycling supply chains, exposing formal recyclers to upstream fraud liability, input tax credit reversals, tax notices and frozen working capital. Under current rules the last visible supplier bears tax risk; modeling predicts widening revenue gaps through 2035. Two legal-policy pathways examined are applying reverse charge to scrap (placing payment obligation on documented buyers) and reducing scrap GST rates to curb arbitrage. Recommendations include aligning GST with Extended Producer Responsibility, creating common facility centres, city-level formalization plans, and protections for waste collectors. Reforms aim to stabilize cash flows, improve financing prospects, and boost compliance.