New GST Rate on Steel and Related Products
Quick Summary
- Most steel products, like TMT bars and steel rods, have an 18% GST rate.
- Steel scrap and certain steel items, such as bars and tubes, have a 5% GST rate.
- Businesses can claim Input Tax Credit for raw materials, transport, and processing costs.
- GST compliance includes registration, proper invoicing, and filing monthly returns.
- Clear HSN codes and input tax credits help streamline tax processes in the steel industry.
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 hsn code and GST rate, cover key product categories, HSN codes, and answer common questions — all in simple terms.
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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.
However, some specific steel-related products may attract lower GST rates (such as 5%) depending on their HSN classification, particularly certain types of steel scrap or specific iron products.
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GST Rate on Steel Products in India
Under India’s GST regime, most steel products fall under the 5% GST slab. The rates apply to common steel categories such as scrap, bars, rods, pipes, and tubes.
The GST structure for steel remains unchanged even after the updates effective after 22 September 2025, and these items do not attract any compensation cess.
New GST Rate Table for Steel Products
| HSN Code | Product Description | GST Rate (After 22 Sept 2025) |
GST Rate (Before 22 Sept 2025) |
|---|---|---|---|
| 7204 | Steel scrap or remelting scrap ingots | 5% | 5% |
| 7214 | Steel bars and rods, including twisted and deformed bars | 5% | 5% |
| 7303 | Tubes, pipes, and hollow profiles of cast iron | 5% | 5% |
| 7304 | Tubes and hollow profiles, seamless, of iron or steel | 5% | 5% |
All these categories fall under GST on steel products and are taxed at 5% regardless of whether the steel is in raw material form or processed form.
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
(After 22 Sept 2025) 5%
(Before 22 Sept 2025) 5%
How to Calculate GST on Steel
Calculating GST on steel products is simple because most steel items fall under a flat 5% GST rate.
GST Calculation Formula
GST Amount = (Product Price × GST Rate) ÷ 100
Final Price = Product Price + GST Amount
Example Calculation
Suppose the price of steel rods is ₹50,000.
- GST Rate = 5%
- GST Amount = ₹50,000 × 5% = ₹2,500
Final price including GST = ₹52,500
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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.
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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.
