The scrap hsn code follows the material: iron and steel scrap is 7204, copper and brass scrap 7404, aluminium scrap 7602 and plastic scrap 3915, all with GST at 18%. Waste paper (4707) and cotton waste (5202) are the cheaper lines at 5%.
A business selling its own factory scrap must charge GST like any other sale. This page lists the codes, explains how to bill a scrap sale, the reverse charge and TCS points, and the risks buyers face. The metals hub is iron and steel.
Scrap: codes and GST rates
Item / HSN / GST- Iron and steel scrap, MS scrap, HMS18%Ferrous waste and remelting ingots
- Stainless steel scrap18%Within ferrous scrap
- Copper scrap18%Copper waste and scrap
- Brass scrap18%Copper alloy scrap
- Aluminium scrap18%Aluminium waste and scrap
- Plastic scrap and regrind18%Waste, parings and scrap of plastics
- Waste paper and cardboard5%Recovered paper for recycling
- Rubber scrap and old tyres18%Waste of rubber
- Cotton waste5%Yarn waste and garneted stock
- Battery scrap and E-waste18%Spent batteries and electronic waste
Quick facts
Ferrous scrap
7204 at 18% (9% CGST + 9% SGST)Non-ferrous scrap
7404 copper, 7602 aluminium, 7902 zinc, 7802 leadLower rates
Waste paper 5%, cotton waste 5%Digits to print
4 digits up to Rs 5 crore turnover, 6 aboveReverse charge
Applies to some sales by government bodiesRisk area
Fake invoices are common in scrap trade
Scrap hsn code and gst rate by material
| Material | HSN | GST |
|---|---|---|
| Cast iron scrap | 7204 10 | 18% |
| Stainless steel scrap | 7204 21 | 18% |
| Other alloy steel scrap | 7204 29 | 18% |
| Tinned iron scrap | 7204 30 | 18% |
| Turnings, shavings, borings | 7204 41 | 18% |
| Other ferrous scrap, HMS | 7204 49 | 18% |
| Copper and brass scrap | 7404 | 18% |
| Aluminium scrap | 7602 | 18% |
| Lead scrap | 7802 | 18% |
| Zinc scrap | 7902 | 18% |
| Plastic scrap | 3915 | 18% |
| Rubber scrap | 4004 | 18% |
| Waste paper | 4707 | 5% |
| Cotton waste | 5202 | 5% |
7204 hsn code description: MS scrap and HMS
Heading 7204 holds ferrous waste and scrap and remelting scrap ingots. MS scrap from a fabrication shop, heavy melting scrap (HMS), turnings and borings from machine shops, and old steel structures sold for melting all go here. Usable offcuts of plates or bars that are sold for reuse, not melting, may stay with the plate or bar heading; see MS plates.
Copper scrap, brass scrap and aluminium scrap
Copper waste, including brass scrap and copper wire scrap, is 7404 at 18%. Aluminium scrap, from old utensils to extrusion waste, is 7602 at 18%. Prices of these metals are high, so tax authorities watch this trade closely. See copper and brass and aluminium.
Plastic scrap hsn code and gst rate
Waste, parings and scrap of plastics, including regrind and old crates sold for recycling, are 3915 at 18%. Recycled granules made from scrap are primary forms under 3901 to 3914, also 18%. See plastics.
Gst on scrap sale by a business
A manufacturer or trader selling its own scrap charges GST at the scrap rate on a tax invoice, even if scrap is not its main business. The sale must be shown in GSTR-1 under the scrap HSN. Credit taken on the original inputs need not be reversed when process scrap is sold with tax.
Factory scrap sale bill: MS scrap HMS 1 and 2, HSN 7204 49, 8.5 tonnes, taxable value Rs 2,38,000. CGST 9% Rs 21,420. SGST 9% Rs 21,420. Total Rs 2,80,840.
Reverse charge, TCS and buyer risks
- When a government department, union territory or local authority sells scrap, a registered buyer may have to pay the GST itself under reverse charge.
- Income tax law requires the seller to collect TCS on scrap sales in many cases; this is separate from GST.
- Buyers lose input tax credit if the seller does not pay the tax or files fake invoices. Check the seller's GSTIN, returns and e-way bills before paying.
- A scrap lot moving by truck needs an e-way bill when the value exceeds the limit.
This summary of scrap codes and rules is general information. Scrap sales by public bodies, TCS and credit risks depend on the facts of each deal, so check the latest notification on the GST portal and ask a GST practitioner or chartered accountant before entering into large scrap contracts.
Frequently asked questions
What is the GST rate on scrap?
Metal and plastic scrap are taxed at 18%. Waste paper and cotton waste are 5%.
What is the hsn code for MS scrap?
MS and iron scrap is 7204, usually 7204 49 for heavy melting scrap, at 18%.
What is the aluminium scrap hsn code?
Aluminium waste and scrap is 7602, at 18%.
What is the 3915 hsn code gst rate?
3915, plastic waste and scrap, is taxed at 18%.
Is GST charged on sale of factory scrap?
Yes. A registered business selling scrap must charge GST at the scrap rate on a tax invoice.