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GST Rate on Sale of Scrap Materials with HSN Code

GST Rate on Sale of Scrap Materials with HSN Code

Read this informative post to find GST rates for scrap material with HSN Code, including plastic, rubber, wood, and paper waste.

54th GST Council Meeting – A 2% TDS will be deducted when a registered person sells metal scrap to another registered business.

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What is the Meaning of Scrap?

Scrap is nowhere related to GST Laws. One could only see its meaning as per the normal mode of business. However, as per the dictionary, scrap means the “waste that either has no economic value or only the value of its basic material content recoverable through recycling”.

In terms of the GST regime, the scrap doesn’t have to be tested and passed through the manufacturer or the mechanical process.

The scrap is the supply of tax under GST norms, its rate of GST has depended upon the nature of the scrap and the HSN code.

For determining the value of supply or GST the tax obtained at the source in the provision of income tax 1961, should not be included. TCS U/s 206(C)(1) of the Income Tax Act, 1961 should be managed on value inclusive of GST.

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    Finding the tedious task is difficult but the taxability of trash and scrap is not controversial. The highest proportion of GST in the scrap materials substance is 18%.

    Read Also: GST Impact on Aluminium Scrap Industry in India

    Scrap Dealers on Strike Against GST Dept

    The GST department has been facing an indefinite strike from the Iron Scrap Traders Association of Mandi Gobindgarh, with aggression to sort out the misunderstanding between the department in relation to the bogus entity.

    The association president had said “Traders purchase scrap and other material from firms in the state, outside and abroad. They supply it to furnaces and mills and pay suppliers as per bills received through banks. They also confirm on the GST portal that suppliers have filed GSTR-1 returns.”

    The president had also warned that if the GST department does not come up with a solution then there will be a big strike by closing operations.


    GST Rate on Scrap Materials with HSN Code

    HSN CodeDescriptionGST Rate
    3915Plastic waste, parings or scrap18% | read notification
    4004Rubber waste, parings or scrap5%
    4004Powders and Granules obtained from waste, parings and scrap of rubber18%
    4017 00 20 Hard Rubber waste or scrap 5%
    4401 Wood Scrap5%
    4415Packing cases, Box, Crates, Drums5%
    4707Paper waste or scrap5%
    7001Cullet or other waste or scrap of Glass5%
    2524Asbestos waste5%
    7112Waste and scrap of precious metal3%
    3006 Pharmaceutical Waste (except Contraceptives)12%
    3825Municipal waste, sewage sludge, clinical waste0%
    2621Slag Ash Waste18%
    7204Vehicle Scrap18%
    7204MS Scrap of all types18%
    7204Scrap US Rail18%
    7404Copper Waste Scrap18%
    7408Bronze Waste Scrap18%
    7503 Nickel Waste Scrap18%
    7602Aluminium Waste Scrap18%
    7902Zinc Waste Scrap18%
    8002Tin Waste & Scrap  18%
    8113Cermets and articles thereof waste and scrap18%
    85 E-Waste5%
    8548Waste and scrap of primary Cells primary batteries and electric accumulators18%

    Note:

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