Iron Scrap HSN Code: Classification for Metal and Steel Scrap
Iron scrap is generated in fabrication, engineering, construction and recycling activities. Under GST, iron and steel scrap are grouped under the ferrous waste and scrap headings, and correct HSN code usage is important for scrap dealers, manufacturers and recyclers.
Iron Scrap HSN Code Classification and GST Rates
Here are some commonly used HSN codes and GST rates for this category
| Section | |
|---|---|
| Section No | 15 |
| Section Title | Guide to HSN Section 15 |
| Section Description | BASE METAL & ARTICLES OF BASE METAL |
| Chapter | |
|---|---|
| Chapter No | 72 |
| Chapter Title | Iron & Steel |
| Chapter Description | Iron and steel |
4 Digit HSN Code Classification
| HSN Code | HSN Code Title | GST Rate |
|---|---|---|
| 7204 | Ferrous scrap | 18% |
8 Digit HSN Code Classification
| HSN Code | HSN Code Title | GST Rate |
|---|---|---|
| 72041000 | Waste and scrap of cast iron | 18% |
| 72042110 | Stainless Steel Waste & Scrap (Cartridge Type) | 18% |
| 72042190 | Alloy steel waste and scrap | 18% |
| 72042910 | Other Alloy Steel Waste & Scrap (Cartridge Type) | 18% |
| 72042920 | High Speed Steel Alloy Waste & Scrap | 18% |
| 72042990 | Waste and scrap of alloy steel | 18% |
| 72043000 | Waste and Scrap of Tinned Iron or Steel | 18% |
| 72044100 | Other Iron and Steel Waste & Scrap | 18% |
| 72044900 | Other waste and scrap | 18% |
| 72045000 | Remelting Scrap Ingots | 18% |
* GST rates may vary based on the latest GST notifications
What Is the HSN Code for Iron Scrap
Most iron scrap falls under ferrous waste and scrap entries. Subcodes differ based on the type of metal, such as cast iron, stainless steel or other non-alloy steel. Invoices should clearly describe the scrap so that the classification under the correct iron scrap HSN code is justified.
How Metal and Steel Scrap Are Classified under HSN
Classification depends on whether the scrap is ferrous (iron and steel) or non-ferrous (such as aluminium and copper). Non-ferrous scrap has separate headings in their respective chapters. Ferrous scrap stays within the 7204 heading family, which covers most market scrap categories.
GST Implications on Iron and Steel Scrap
Scrap sales are normally taxable under GST. Registered buyers who use scrap for manufacturing or resale can claim input tax credit, while unregistered buyers cannot. In some periods, specific metal scrap supplies have come under reverse charge, so it is important to check the rules applicable to your transaction date.
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Frequently Asked Questions
-
Do all iron scrap items use the same HSN code?
They generally fall in the same heading but subcodes can differ for cast iron, stainless steel and other scrap types.
-
How should small fabrication shops bill their scrap sales?
They should classify their scrap under the appropriate ferrous scrap subheading and charge GST at the prevailing rate if registered.
-
Does rust or paint on scrap change its HSN classification?
Minor surface conditions like rust or paint usually do not change classification, as long as the goods remain waste and scrap.
-
Are recycled ingots made from scrap classified as scrap?
No. Once scrap is melted and cast into ingots, billets or other semi-finished products, it is classified under semi-finished steel headings rather than scrap.