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“Camu is proposing a VAT rebate of as much as 70% to certain standardised scrap recyclers of scale,” Li Shubin, the association’s executive vp, told Steel First in Beijing.
“The policy could only go ahead if [China’s ministries of taxation, industry and information technology, and finance] give the green light. The plan is still under review, and we also need to work out a list of companies that meet the standards,” Li said.
Some market participants said the guidelines released by the Chinese government in November 2012 could be used as reference for candidates of VAT rebates.
The November guidelines require new ferrous scrap recycling companies to have minimum processing capacity of 150,000 tpy each and existing ones to have at no less than 100,000 tpy capacity by the end of 2014.
“A rebate of 50% sounds more practical. A cut by as much as 70% will be very difficult,” an industry insider close to Camu said.
Previously, the association was rumoured to be hoping for the 17% VAT to be slashed by half.
China Assn of Metal Scrap Utilisation (Camu) is in talks with Chinese authorities for a possible VAT rebate for scrap sales to encourage higher scrap generation.