Scrap HSN Code: Understanding HSN Classifications for Scrap Materials
Scrap materials come from leftover metal, plastic, wood and many other products that are cut, broken or discarded during use or production.
To use the scrap HSN code correctly and charge GST without mistakes, traders, recyclers and manufacturing units need to know how different types of scrap are classified under HSN and which GST rates apply after the changes from 22 September 2025.
What Is the Scrap HSN Code?
Under GST, scrap is classified mainly by the material from which it is made. Ferrous metal scrap, non ferrous metal scrap, plastic scrap and wooden scrap each fall under different chapters and headings of the tariff.
Most iron and steel scrap is grouped in the iron and steel chapter under the heading for ferrous waste and scrap. Aluminium, copper and brass scrap are grouped in the non ferrous metal chapters in headings for waste and scrap of those metals.
Plastic scrap is placed in the plastics chapter in the heading for waste, parings and scrap of plastics. Wooden scrap is grouped in the wood chapter under the heading that covers wood waste and scrap or other wood articles depending on the form.
For daily billing, businesses usually work with a few common four digit HSN families for ferrous scrap, aluminium scrap, copper and brass scrap and plastic scrap and then maintain their own item codes for grades and sizes.
Key Scrap HSN Codes and GST Rates after 22 September 2025
| HSN Code | Product Description | Product Type or Variant | GST Rate |
|---|---|---|---|
| 7204 | Ferrous waste and scrap | MS scrap, steel scrap from structures and machinery | 18% |
| 7602 | Aluminium waste and scrap | Aluminium scrap from profiles, sheets and castings | 18% |
| 7404 | Copper waste and scrap | Copper and brass scrap from wires, tubes and components | 18% |
| 3915 | Waste, parings and scrap of plastics | Plastic scrap from moulding, packaging and bottles | 18% |
| 4401 | Wood waste and scrap | Wooden scrap, offcuts and broken pallets | 18% |
HSN Code for MS, Aluminium, and Iron Scrap
Mild steel and other iron scrap is usually classified under the ferrous waste and scrap heading in the iron and steel chapter. This heading covers scrap from old structures, plant and machinery, rolling waste and many similar items.
Aluminium scrap is classified under the aluminium waste and scrap heading in the non ferrous metal chapter. This includes scrap from aluminium sheets, profiles, cables and castings which will be remelted or processed again.
Copper and brass scrap are classified under the copper waste and scrap heading, since brass is a copper alloy. This heading covers scrap from copper wires, tubes, bus bars and brass components that are collected for recycling.
Plastic scrap from moulding, packaging and other uses is normally classified in the plastics waste and scrap heading, while wooden scrap such as offcuts and broken pallets is usually placed in the wood waste and scrap heading or in other wood article headings based on its form.
GST on Scrap Materials and HSN Code Classification
After the move to the three slab GST structure from 22 September 2025, scrap materials continue to fall mainly in the standard 18% slab. They are not treated as sin or luxury goods and they are not generally placed in the 5% slab for essential items.
This means that MS scrap, iron scrap, steel scrap, aluminium scrap, copper scrap, brass scrap, plastic scrap and wooden scrap are usually taxed at 18% under their respective HSN codes, unless a specific notification gives a different treatment for a particular scrap stream.
For billing, recycling units, scrap dealers and manufacturing units map each scrap item to the correct scrap HSN family and fix the GST rate at 18%. Invoices show the scrap HSN code along with the description, quantity and value so that buyers can see the classification and tax clearly.
During GST return filing, outward supplies of scrap are reported HSN wise. Correct classification and accurate use of the scrap HSN code help match returns with e way bills and purchase records and allow buyers such as foundries and recyclers to claim input tax credit on scrap purchases used in production.
Conclusion
The scrap HSN code system groups MS and other iron scrap in the ferrous scrap heading, aluminium scrap in the aluminium scrap heading, copper and brass scrap in the copper scrap heading, plastic scrap in the plastics scrap heading and wooden scrap in the wood waste and scrap heading.
Since scrap is a regular industrial input and trading commodity, it normally attracts 18% GST under these HSN codes after the changes from 22 September 2025. When scrap dealers and recycling industries link every type of scrap to the correct HSN family and apply the right GST rate in invoices and returns, they keep compliance smooth and reduce the risk of classification disputes or penalties.
I’m CA Chintan Rathod, a Chartered Accountant based in Nagpur with over 4 years of experience. I specialise in Taxation, helping individuals and businesses plan and file their taxes accurately while staying compliant with the latest regulations. My approach is focused on practical, easy-to-understand guidance so clients can make better financial decisions with confidence.
Frequently Asked Questions
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What is the HSN code for scrap in India?
There is no single HSN code for all scrap. MS and iron scrap are usually classified under the ferrous waste and scrap heading, aluminium scrap under the aluminium scrap heading, copper and brass scrap under the copper scrap heading and plastic and wooden scrap under their own waste and scrap headings.
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What is the GST rate for MS, aluminium, and iron scrap?
In general, MS scrap, iron scrap and aluminium scrap attract 18% GST under their scrap HSN codes after the three slab structure that started from 22 September 2025, unless a special notification provides a different rate for a particular category.
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How are scrap materials like copper, iron, and plastic classified under HSN code?
Copper scrap is classified under the copper waste and scrap heading, iron and MS scrap under the ferrous scrap heading and plastic scrap under the plastics waste and scrap heading. Each material follows the waste and scrap heading of its own chapter in the tariff.
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What is the GST rate for scrap materials?
Most common scrap materials such as MS scrap, steel scrap, aluminium scrap, copper scrap, brass scrap and plastic scrap are taxed at 18% under their HSN codes. Wooden scrap also generally follows the 18% rate under wood waste and scrap headings.
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How does the scrap HSN code impact GST filing for recycling industries?
The scrap HSN code tells recycling industries which GST rate to apply and how to show sales in HSN wise tables in GST returns. When scrap is billed with the correct HSN code and 18% rate, buyers can claim input tax credit properly and the tax department gets clear data on scrap trade and recycling activity.