Steel HSN Code: Understanding HSN Classifications for Steel Products
Steel is used in construction, machinery, transport, furniture and many other industries. It is supplied in many forms such as plates, coils, pipes, sections and scrap. To charge GST correctly and claim input tax credit smoothly, businesses must use the correct steel HSN code on every invoice.
In this guide you will learn how steel is classified under HSN, how stainless steel, steel scrap, steel plates and steel pipes are grouped, what GST rates usually apply and how manufacturers and traders use these codes while filing GST returns.
What Is the Steel HSN Code?
Under GST, steel is mainly classified in chapter seventy two which covers iron and steel, and in chapter seventy three which covers articles of iron and steel. There is no single steel HSN code for every product. The correct code depends on whether the item is a raw material, a semi finished product or a finished article.
Base steel products such as ingots, billets, blooms and slabs are placed under early headings in chapter seventy two. Flat rolled products in coils and plates use headings such as 7208, 7209, 7210 and 7211. Long products such as bars, rods and sections are covered under other headings in the same chapter.
Once steel has been made into finished articles like pipes, tubes, structures, tanks, screws or household articles, it often moves to chapter seventy three. This chapter contains headings for tubes and pipes, tube fittings, structures and parts of structures, storage tanks, wire products and many other fabricated steel items.
For day to day work many traders keep a few main steel HSN codes in their item master for plates, coils, scrap and pipes. Large manufacturers use the full six digit or eight digit classification to match each type of steel product exactly with the tariff.
| HSN Code | Product Description | Product Type or Variant | GST Rate |
|---|---|---|---|
| 7208 | Flat rolled products of non alloy steel | MS plates, hot rolled sheets and heavy plates for structural and fabrication use | 18% |
| 7209 | Flat rolled products of non alloy steel, cold rolled | CR sheets and coils for automotive, appliance and precision fabrication use | 18% |
| 7219 | Flat rolled products of stainless steel | Stainless steel sheets and plates for kitchen equipment, tanks and industrial use | 18% |
| 7204 | Ferrous waste and scrap | Steel and stainless steel scrap from fabrication, machining and dismantled machinery | 18% |
| 7214 | Bars and rods of non alloy steel | Mild steel bars, rounds and flats for construction, re-rolling and engineering use | 18% |
| 7306 | Steel tubes, pipes and hollow profiles | Welded and seamless steel pipes for water lines, structures and process pipelines | 18% |
| 7307 | Tube and pipe fittings of iron or steel | Elbows, tees, flanges, reducers and couplings for steel pipeline joints | 18% |
HSN Code for Stainless Steel Scrap and Steel Plates
Stainless steel has its own group of headings inside chapter seventy two. Stainless steel in ingot or semi finished form is classified under headings such as 7218, while flat rolled stainless steel products use headings like 7219 and 7220. Stainless steel bars, rods and sections fall under headings such as 7221 and 7222.
When stainless steel is supplied as sheets or plates the product is usually placed under headings 7219 or 7220 depending on whether it is hot rolled or cold rolled and on the finishing. In simple trading practice, many suppliers use a common stainless steel sheet or plate HSN code from this family for all stainless sheets and plates of common grades.
Steel scrap is usually classified under heading 7204 which covers ferrous waste and scrap. This heading includes scrap arising from the manufacture or mechanical working of iron or steel and scrap from old steel goods that are broken up. Stainless steel scrap is also covered within this scrap heading when it meets the conditions of ferrous waste and scrap.
Steel plates that are not stainless are generally flat rolled products of non alloy steel. They are commonly classified under headings like 7208 and 7209 depending on whether they are hot rolled or cold rolled and on their thickness. Heavy plates for structural use, ship building and machinery are normally placed under these flat rolled steel headings.
Steel pipes and tubes are mostly covered in chapter seventy three under headings such as 7306 and 7307. These headings cover welded and seamless pipes as well as tube fittings like elbows and flanges. This means that steel pipes do not use the same HSN code as steel plates or scrap, even though they are made from steel.
GST on Steel Products and HSN Code Classification
Under the present GST structure, most common steel products are taxed at 18% GST . This standard slab usually applies to flat rolled steel products, bars and rods, stainless steel items, steel scrap and steel pipes that are used in construction and industry.
Earlier, some special steel products could fall in a higher slab, but after the rate rationalisation that reduced the number of slabs, most regular iron and steel items now fall in the 18% slab. Only special cases where a notification gives a concessional rate or a different treatment would move away from this standard rate.
Steel scrap under heading 7204 is also generally taxed at 18% GST. Since scrap is widely used as a raw material by foundries and rolling mills, having the same rate as many finished steel products helps keep the input tax credit chain smooth in the steel industry.
Steel pipes and tubes under headings such as 7306 and 7307 are also commonly placed in the 18% slab. These products are used in construction, water projects, oil and gas pipelines and industrial plants, so accurate classification under chapter seventy three is important for both suppliers and project owners.
During GST billing and return filing, steel manufacturers and traders assign HSN codes from chapters seventy two and seventy three to every item in their product master. Invoices clearly show whether a product is plates, coils, scrap, pipes or fabricated structures and which HSN code has been applied. In GSTR one and other returns, they then report steel turnover under these headings in HSN wise summaries so that the tax department can match the declared tax with the correct product categories.
On the buyer side, builders, fabricators and engineering companies that purchase steel can claim input tax credit on the 18% GST charged, subject to normal conditions. When the HSN code on the purchase invoice matches the nature of the steel product and the correct GST rate, it becomes easier to support the credit claim during audits and assessments.
Conclusion
The steel HSN code framework splits steel into raw materials, semi finished products and finished articles across chapters seventy two and seventy three. Stainless steel products, steel scrap, steel plates and steel pipes all have specific headings inside these chapters that must be used correctly in GST invoices .
When businesses map each steel item to the right HSN code and apply the standard GST slab of 18% for most regular steel products, their billing becomes accurate and input tax credit flows smoothly along the steel supply chain. This reduces the risk of disputes, interest and penalties that can arise from wrong classification or wrong GST rates on steel products.
Jagdish Prasad is a Chartered Accountant with over 5 years of experience. He helps people and businesses with GST, income tax, and HSN codes. Jagdish makes sure his clients follow all tax rules and save money the right way. He also enjoys writing simple articles to help others understand taxes and stay updated with the latest rules.
Frequently Asked Questions
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What is the HSN code for steel in India?
There is no single HSN code for all steel in India. Basic steel products and semi finished steel are generally classified in chapter seventy two, while finished articles such as pipes and structures are placed in chapter seventy three under different headings.
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How does GST apply to steel products under the HSN code?
Most regular steel products including plates, coils, bars, rods, scrap and pipes are taxed at 18% GST under their respective HSN codes in chapters seventy two and seventy three. Only specially notified products enjoy a concessional rate or a different treatment.
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What is the HSN code for stainless steel?
Stainless steel products fall under specific headings in chapter seventy two. Flat rolled stainless steel sheets and plates are commonly classified under headings 7219 and 7220, while stainless steel bars and rods use headings such as 7221 and 7222.
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How are steel scrap pipes and plates classified under the HSN code?
Steel scrap is usually classified under heading 7204 as ferrous waste and scrap. Steel plates are generally placed under flat rolled steel headings like 7208 and 7209. Steel pipes and tubes are normally classified under chapter seventy three in headings such as 7306 and 7307.
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What are the GST rates for steel products under the HSN code?
Most common steel products under chapters seventy two and seventy three are taxed at 18% GST. This includes stainless steel sheets, mild steel plates, steel scrap and steel pipes, unless a specific notification prescribes a different rate for a particular product.