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Scrap trading is a crucial part of the Indian economy. Whether it’s metal waste, old machinery, or paper scrap, recycling industries rely heavily on scrap dealers and suppliers. With GST in place, knowing the gst for scrap helps businesses price correctly and stay compliant with tax rules.
Scrap refers to waste or discarded material generated during the manufacturing or production process, or after the useful life of a product.
These materials are bought and sold in large volumes and attract specific GST rates based on their type.
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The general gst on scrap is 18%, unless a different rate is notified for a specific type. The tax is applicable whether:
| Type of Scrap | HSN Code | GST Rate |
|---|---|---|
| Iron and steel scrap | 7204 | 18% |
| Aluminium scrap | 7602 | 18% |
| Copper scrap | 7404 | 18% |
| Brass scrap | 7402 | 18% |
| Paper waste/scrap | 4707 | 12% |
| Plastic scrap | 3915 | 18% |
| Rubber scrap (worn tyres) | 4004 | 18% |
| E-waste (under specific rules) | 84/85/90 | 5% (conditions apply) |
Iron and steel are the most commonly traded scrap materials. The iron scrap gst rate is:
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Any GST-registered business that sells scrap material must:
Even job workers or contractors generating scrap during production must follow the same rule.
Buyers of scrap (like recyclers or manufacturers) can claim Input Tax Credit on GST paid during scrap purchases, provided:
So, GST becomes a flow-through tax for B2B scrap deals.
BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.