What is Scrap Under GST?
Under GST, scrap generally refers to waste and discarded materials arising from manufacturing, mechanical working, dismantling, or usage, which are no longer usable as such.
Scrap is classified under different HSN Chapters depending on material type — metal, plastic, paper, rubber, e-waste, etc.
If you are searching for Scrap HSN Code (6 digit or 8 digit) with GST rate, this guide provides legally correct classification as per GST Tariff.
Scrap must be classified based on material composition, not original product.
1️⃣ Iron & Steel Scrap HSN Code
Legal Tariff Heading: Chapter 72
Primary Heading: 7204 – Ferrous waste and scrap
Common 6-Digit HSN Codes:
| Description | 6-Digit HSN | GST Rate |
|---|---|---|
| Cast iron waste & scrap | 720410 | 18% |
| Stainless steel scrap | 720421 | 18% |
| Alloy steel scrap | 720429 | 18% |
| Other ferrous scrap | 720449 | 18% |
Common 8-Digit Example:
- 72044900 – Other ferrous waste & scrap
👉 GST Rate: 18%
This is the most commonly used Scrap HSN Code in India.
2️⃣ Aluminium Scrap HSN Code
Chapter 76
Heading: 7602 – Aluminium waste and scrap
| Description | 6-Digit HSN | GST Rate |
|---|---|---|
| Aluminium waste & scrap | 760200 | 18% |
8-Digit:
- 76020010 – Aluminium scrap (used beverage cans etc.)
- 76020090 – Other aluminium scrap
GST Rate: 18%
3️⃣ Copper Scrap HSN Code
Chapter 74
Heading: 7404 – Copper waste and scrap
| Description | 6-Digit HSN | GST Rate |
|---|---|---|
| Copper waste & scrap | 740400 | 18% |
8-Digit:
- 74040012 – Copper wire scrap
- 74040022 – Brass scrap
- 74040090 – Other copper scrap
GST Rate: 18%
4️⃣ Plastic Scrap HSN Code
Chapter 39
Heading: 3915 – Plastic waste and scrap
| Description | 6-Digit HSN | GST Rate |
|---|---|---|
| Plastic waste & scrap | 391510 | 18% |
| Other plastic scrap | 391590 | 18% |
8-Digit Example:
- 39151000 – Waste of polymers of ethylene
- 39159090 – Other plastic waste
GST Rate: 18%
5️⃣ Paper Scrap HSN Code
Chapter 47
Heading: 4707 – Recovered (waste and scrap) paper
| Description | 6-Digit HSN | GST Rate |
|---|---|---|
| Unbleached kraft paper scrap | 470710 | 12% |
| Other paper scrap | 470790 | 12% |
8-Digit:
- 47071000 – Kraft paper scrap
- 47079000 – Other waste paper
GST Rate: 12%
⚠ Many dealers incorrectly charge 18% — correct rate is 12%.
6️⃣ Rubber Scrap HSN Code
Chapter 40
Heading: 4004 – Waste and scrap of rubber
| Description | 6-Digit HSN | GST Rate |
|---|---|---|
| Rubber waste & scrap | 400400 | 18% |
7️⃣ Glass Scrap HSN Code
Chapter 70
Heading: 7001 – Cullet and other waste & scrap of glass
| Description | 6-Digit HSN | GST Rate |
|---|---|---|
| Glass scrap (cullet) | 700100 | 18% |
Important Compliance Note (Very Important)
Under GST Notification No. 78/2020-CT:
- Turnover up to ₹5 crore → 4-digit allowed (B2B mandatory)
- Turnover above ₹5 crore → Minimum 6-digit mandatory on invoice
Therefore, for professional compliance, always use 6-digit HSN.
For customs or precise classification disputes, use 8-digit.
Example – Proper Invoice Classification
A manufacturer sells stainless steel scrap:
Correct HSN (6-digit): 720421
GST Rate: 18%
Invoice must mention:
HSN: 720421
GST: 18%
This ensures compliance and avoids classification notice.
Legal Framework Governing Scrap HSN Code Under GST
Scrap classification under GST is governed by:
-
GST Tariff Act aligned with Customs Tariff Act
-
HSN explanatory notes
-
Notification No. 1/2017-CT (Rate)
-
Section 9 of CGST Act (RCM provisions)
GST rates on scrap are determined based on tariff headings notified under GST rate schedule.
When Can Scrap Classification Be Disputed by Department?
Scrap HSN Code disputes may arise if:
-
Material composition is unclear
-
Invoice mentions wrong HSN
-
GST rate mismatch found in audit
-
ITC claimed under wrong classification
During audit, officers verify:
-
Purchase invoices
-
Sales invoices
-
GSTR-1 HSN summary
-
E-way bill data
Incorrect Scrap HSN Code may trigger:
-
Demand under Section 73 or 74
-
Interest under Section 50
-
Penalty under Section 122
Reverse Charge (RCM) Reminder
RCM applicability depends on notified categories under Section 9(3) of CGST Act.
Always verify latest notification before applying reverse charge on scrap purchase.
Common Mistakes to Avoid
❌ Using only 4-digit HSN when 6-digit required
❌ Classifying scrap under finished goods chapter
❌ Wrong GST rate on paper scrap
❌ Ignoring turnover-based HSN compliance rule
Final Practical Summary (Quick Answer Table)
| Scrap Type | Correct 6-Digit HSN | GST Rate |
|---|---|---|
| Iron scrap | 720410 / 720421 / 720449 | 18% |
| Aluminium scrap | 760200 | 18% |
| Copper scrap | 740400 | 18% |
| Plastic scrap | 391510 / 391590 | 18% |
| Paper scrap | 470710 / 470790 | 12% |
| Rubber scrap | 400400 | 18% |
| Glass scrap | 700100 | 18% |
Conclusion
For accurate GST compliance:
- Use 6-digit HSN minimum (if turnover > ₹5 Cr mandatory)
- Classify based on material
- Verify GST rate
- Check RCM applicability
Proper Scrap HSN Code classification reduces litigation risk and penalty exposure.
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