Iron GST Rate in India: Categories and Applications
Iron is one of the most widely used materials in industries like construction, manufacturing, and infrastructure. Whether it’s raw iron, rods, or scrap, knowing the correct iron gst rate helps in proper billing, tax compliance, and cost planning. Let’s break down how GST applies to different forms of iron in India.
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GST Classification and HSN Codes for Iron
Under GST, iron and steel products are categorized under Chapter 72 of the HSN code system. The tax rate depends on whether the product is raw, processed, or scrap.
| Iron Product | HSN Code | GST Rate |
|---|---|---|
| Iron and non-alloy steel (ingots, billets) | 7206–7207 | 18% |
| Iron rods, bars, and wires | 7213–7215 | 18% |
| Stainless steel bars/rods | 7222 | 18% |
| Scrap of iron and steel | 7204 | 18% |
So, whether you’re dealing in raw material or fabricated goods, the gst on iron is mostly set at 18%.
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GST on Iron Rod
Iron rods are crucial in the construction industry, especially for reinforcing concrete. The gst on iron rod is 18%, making it one of the key taxable construction inputs.
- iron rod gst rate is the same whether you purchase TMT bars, steel rods, or plain iron rods.
- These items are generally listed under HSN Code 7214.
- This rate has remained consistent and is applied at the point of sale or invoice generation.
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GST on Iron Scrap
Iron scrap is also a significant part of the industry, used for recycling and manufacturing new products.
- The iron scrap gst rate is 18%.
- It falls under HSN Code 7204, which includes both ferrous waste and scrap.
- Despite being a recycled product, gst on iron scrap is charged at the same rate as new iron materials.
Buyers and sellers must ensure proper documentation and GST invoicing.
Input Tax Credit for Iron-Related Purchases
Businesses dealing in construction, manufacturing, or trading of iron can claim Input Tax Credit (ITC) on:
- Purchases of raw iron, rods, or scrap
- Transport and logistics services
- Packaging and handling charges
To claim ITC, ensure:
- The supplier is GST-registered
- The invoice has a valid GST number and HSN code
- The tax has been paid and reported in returns
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Iron and Construction Industry: GST Impact
- Cost predictability: Fixed rates help builders and contractors plan budgets
- Compliance burden: All iron suppliers and buyers above the GST threshold must register and file returns
- ITC advantage: Claiming ITC helps offset input costs, improving cash flow for registered businesses
Understanding the correct gst on iron, rods, and scrap helps manufacturers, traders, and builders price their materials right, stay tax-compliant, and benefit from input credits.
Hi there! I’m a Chartered Accountant with over 20 years of experience in financial accounting and a passion for writing. I enjoy simplifying complex topics like GST and income tax, believing that learning should be a lifelong journey. I'm here to share insights and make financial matters easier for everyone!
Frequently Asked Questions (FAQs)
- What is the GST rate on iron products in India?The general iron GST rate is 18%, applicable to most forms like rods, bars, and billets.
- What is the GST on iron rod?The GST on iron rod is 18%, under HSN codes 7213 to 7215.
- What is the GST rate on iron scrap?Iron scrap GST rate is also 18%, under HSN Code 7204.
- Can I claim ITC on iron and steel purchases?Yes. If you’re registered under GST and use iron for business, you can claim Input Tax Credit.
- Is there any GST exemption for iron products?No. As of now, iron and steel products are not exempt under GST.
