Scrap HSN Code: Understanding HSN Classifications for Scrap Materials

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

Scrap HSN Code Classification and GST Rates

Here are some commonly used HSN codes and GST rates for this category

Section Classification

Chapter Classification

4 Digit HSN Code Classification

8 Digit HSN Code Classification

* GST rates may vary based on the latest GST notifications.

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.