Steel HSN Code: Understanding HSN Classifications for Steel Products

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.

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.