GST Rate on Steel and Related Products
The steel industry is the backbone of infrastructure and construction in India. With the introduction of the Goods and Services Tax (GST), the tax structure for steel has become much simpler and more uniform. In this blog, we’ll break down the steel GST rate, cover key product categories, HSN codes, and answer common questions — all in simple terms.
BOOK A FREE DEMO
What is the GST on Steel?
Most steel products attract a GST rate of 18%. This unified tax rate makes things easier for manufacturers, traders, and consumers to comply with the tax system. Whether it’s raw steel, TMT bars, or pipes, the GST rates are largely consistent.
Get a Free Trial – Best Accounting Software For Small Business
GST Rate Table for Steel Products
Here’s a table showing the applicable GST rates for major steel items along with their HSN codes:
| HSN Code | Product Description | GST Rate |
|---|---|---|
| 7204 | Steel scrap or remelting scrap ingots | 18% |
| 7214 | Steel bars and rods, including twisted and deformed bars | 18% |
| 7303 | Tubes, pipes, and hollow profiles of cast iron | 18% |
| 7304 | Tubes and hollow profiles, seamless, of iron or steel | 18% |
All these categories come under the gst on steel and are taxed at 18% regardless of their form — raw material or processed.
Get a Free Trial – Best GST Accounting Software For Small Business
GST on TMT Bars and Steel Rods
TMT bars are widely used in the construction of buildings, bridges, and infrastructure. They fall under the same HSN code 7214 as other steel rods and bars and carry a GST rate of 18%.
So if you’re buying or selling TMT bars, the tax you’ll pay or charge is straightforward — 18% GST on steel bar products.
GST on Steel Scrap
Steel scrap is vital in recycling and the production of new steel. It is categorized under HSN code 7204 and attracts an 18% GST. This helps streamline the tax process for scrap dealers and recyclers as well.
Can Businesses Claim Input Tax Credit (ITC)?
Yes, if you’re a registered business dealing with steel products, you can claim Input Tax Credit on:
- Purchase of raw materials (e.g., steel scrap, billets)
- Transport services
- Processing costs like cutting, shaping, or galvanizing
This makes the gst on steel business-friendly, as it allows for tax offsets and improves cash flow.
Explore a Free Demo of – Best Inventory Management Software For Small Business
GST Compliance for Steel Traders and Manufacturers
If you’re in the steel industry, here’s what you need to ensure:
- GST registration if your turnover exceeds the threshold
- Proper invoicing with HSN codes and applicable GST
- Filing monthly GST returns (GSTR-1 and GSTR-3B)
- Maintaining books of accounts with UPI and other payment records (if digital payments are accepted)
Conclusion
The steel GST rate is straightforward — most items in this category, including steel bars, pipes, and scrap, are taxed at 18% under GST. With clear HSN classifications and the benefit of input tax credits, the GST regime helps streamline operations in the steel sector.
Understanding the steel GST rate is essential for staying compliant and maximizing your tax benefits. Whether you’re a small trader or a large manufacturer, keeping up with GST rules will help you run your business smoothly.
I am a chartered accountant with over 14 years of experience. I understand income tax, GST, and balancing financial records. I analyze financial statements and tax codes effectively. However, I also have a passion for writing, which is different from working with numbers. Recently, I started writing articles and blog posts. My goal is to make finance easier for everyday people to understand.
Frequently Asked Questions (FAQs)
- What is the standard steel GST rate?The standard GST rate on most steel items, including bars, rods, pipes, and scrap, is 18%.
- Is the GST rate different for different steel types?No. Whether it’s mild steel, alloy steel, or non-alloy steel, the gst on steel remains 18% in most cases.
- What is the gst on steel bar used in construction?Steel bars, including TMT and twisted bars, fall under HSN code 7214 and attract 18% GST.
- Do I need to mention HSN codes on invoices?Yes, if your turnover exceeds the prescribed limit. Including HSN codes ensures GST compliance and smooth audits.
- Can I claim GST credit for steel scrap purchases?Yes, if you’re a GST-registered business using steel scrap as manufacturing input, you can claim input tax credit.
