New GST Rate on Steel and Related Products
- Most steel products, including TMT bars, steel rods, bars, and tubes, attract 18% GST.
- Steel scrap and specific steel products are taxed according to their applicable HSN classification.
- Businesses can claim eligible Input Tax Credit (ITC) on raw materials, transport, and processing costs.
- GST compliance includes registration, proper invoicing, and timely return filing.
- Correct HSN codes and ITC records help streamline tax compliance 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 applies to commonly used steel products such as raw steel, TMT bars, rods, pipes, and tubes.
Some specific iron and steel products may have different GST rates depending on their HSN classification.
GST Rate on Steel Products in India
Under India’s GST regime, most steel products fall under the 18% GST slab. The rates apply to common steel categories such as TMT bars, bars, rods, pipes, and tubes.
The GST structure for commonly used steel products remains unchanged after the updates effective from 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 | 18% | 5% |
| 7214 | Steel bars and rods, including twisted and deformed bars | 18% | 18% |
| 7303 | Tubes, pipes, and hollow profiles of cast iron | 18% | 18% |
| 7304 | Tubes and hollow profiles, seamless, of iron or steel | 18% | 18% |
HSN Code
Product Description
GST Rate
(After 22 Sept 2025)
GST Rate
(Before 22 Sept 2025)
HSN Code
Product Description
GST Rate
(After 22 Sept 2025)
GST Rate
(Before 22 Sept 2025)
HSN Code
Product Description
GST Rate
(After 22 Sept 2025)
GST Rate
(Before 22 Sept 2025)
HSN Code
Product Description
GST Rate
(After 22 Sept 2025)
GST Rate
(Before 22 Sept 2025)
Steel products are taxed according to their applicable HSN classification. Common steel bars, rods, pipes, and tubes attract 18% GST, while certain categories such as steel scrap may attract different rates.
How to Calculate GST on Steel
Calculating GST on steel products depends on the applicable HSN classification. Most commonly used steel products, such as rods, bars, pipes, and tubes, attract 18% GST, while certain categories like steel scrap may have different rates.
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 = 18%
- GST Amount = ₹50,000 × 18% = ₹9,000
Final price including GST = ₹59,000
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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 depends on the product category and applicable HSN classification. Common steel products, including steel bars, TMT bars, and pipes, attract 18% GST, while specific categories such as steel scrap may attract different rates.
With clear HSN classifications and proper Input Tax Credit records, businesses can maintain GST compliance and streamline operations in the steel sector.
Understanding the steel GST rate is essential for staying compliant and managing tax obligations effectively. Whether you’re a small trader or a large manufacturer, keeping accurate GST records helps your business run smoothly.
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Frequently Asked Questions
Clear answers to common queries about this topic.
What is the standard steel GST rate?
The standard GST rate on most steel items, including bars, rods, and pipes, is 18%. However, certain categories such as steel scrap may attract a different GST rate based on their HSN classification.
Is the GST rate different for different steel types?
Yes. GST on steel depends on the product category and HSN classification. Most finished steel products like bars, rods, and pipes attract 18% GST, while certain categories such as steel scrap may have different GST rates.
What is the gst on steel bar used in construction?
Do I need to mention HSN codes on invoices?
Can I claim GST credit for steel scrap purchases?
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Vineet Goyal
Chartered Accountant
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.
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