In 2023, India produced approximately 118,201 kt of steel, securing its position as the world’s second-largest steel producer. With the iron and steel industry in India expected to generate around $128.5 billion in 2024, the steel GST rate remains a significant concern.
This article will examine the applicability of GST on steel and iron, explore the current GST on iron and steel rates, review the taxation landscape before GST, and discuss the broader implications of these taxation changes on the iron and steel industry in India.
Table of Contents
What is the GST on Steel and Iron?
Iron and steel bars, scraps, pipes, sheets, and wires are generally subject to an 18% GST rate in India.
Read About: Latest GST Rates on Goods and Services in 2024
Latest GST Rates on Steel & Iron Bars and Other Products in 2024
As per GST Guidelines, Here’s the list of GST Rates on Steel and Iron based products
Steel and Iron Products |
GST Rate |
HSN Code |
| Unroasted iron pyrites | 5% | 2502 |
| Iron ores and concentrates, including roasted iron pyrites. | 18% | 2601 |
| Iron and non-alloy steel ingots and primary forms | 18% | 7206 |
| Iron or non-alloy steel semi-finished products | 18% | 7207 |
| Flat-rolled iron or non-alloy steel products | 18% | 7208 to 7212 |
| Iron or non-alloy steel bars and rods | 18% | 7213 to 7215 |
| Iron or non-alloy steel angles, shapes, and sections | 18% | 7216 |
| Iron or non-alloy steel wire | 18% | 7217 |
| Stainless steel ingots, primary forms, and semi-finished products | 18% | 7218 |
| Stainless steel flat-rolled products | 18% | 7219, 7220 |
| Stainless steel bars and rods | 18% | 7221, 7222 |
| Stainless steel wire | 18% | 7223 |
| Other alloy steel ingots, primary forms, and semi-finished products | 18% | 7224 |
| Other alloy steel flat-rolled products | 18% | 7225, 7226 |
| Other alloy steel bars and rods | 18% | 7227, 7228 |
| Other alloy steel wire | 18% | 7229 |
| Iron or steel sheet piling and welded sections | 18% | 7301 |
| Iron or steel railway or tramway track construction material | 18% | 7302 |
| Cast iron tubes, pipes, and hollow profiles | 18% | 7303 |
| Iron or steel tubes, pipes, and hollow profiles (other than cast iron) | 18% | 7304 |
| Large diameter welded, riveted, or similar iron or steel tubes and pipes, with an external diameter exceeding 406.4 mm | 18% | 7305 |
| Iron or steel tubes, pipes, and hollow profiles (welded, riveted, or similar) | 18% | 7306 |
| Iron and Steel tube or pipe fittings (such as couplings, elbows, and sleeves) | 18% | 7307 |
| Structures made of iron or steel (Bridges and bridge sections, Lock gates, Towers, Lattice masts, Roofs and roofing frameworks, Doors, windows, door frames, thresholds, and shutters, Balustrades, pillars, and columns)
[other than transmission towers] |
18% | 7308 |
| Iron or steel reservoirs, tanks, vats, and similar containers with a capacity exceeding 300 liters are used for storing materials (other than compressed or liquefied gas). | 18% | 7309 |
| Small iron or steel tanks, casks, drums, cans, and boxes with a capacity of up to 300 liters for holding non-gas substances. | 18% | 7310 |
| Iron or steel containers for compressed or liquefied gas. | 18% | 7311 |
| Uninsulated iron or steel wire, rope, cable, band, sling, and similar products. | 18% | 7312 |
| Iron or steel barbed wire, single or twisted flat wire (barbed or unbarbed), and loosely twisted double wire for fencing. | 18% | 7313 |
| Iron or steel wire cloth, including endless bands, grills, netting, fencing, and expanded metal sheets. | 18% | 7314 |
| Iron or steel anchors, grapnels, and their components. | 18% | 7316 |
| Iron or steel nails, tacks, drawing pins, corrugated nails, and staples | 18% | 7317 |
| Iron or steel screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, and washers (including spring washers). | 18% | 7318 |
| Handheld iron or steel knitting needles, bodkins, crochet hooks, embroidery stilettos, and similar tools. Also includes safety pins and other unspecified iron or steel pins. | 18% | 7319 |
| Iron and steel springs and spring leaves. | 18% | 7320 |
| Iron or steel stoves, ranges, grates, cookers (including those with built-in boilers for heating), barbecues, braziers, gas rings, plate warmers, and similar non-electric household appliances, and their parts. | 18% | 7321 |
| Iron or steel kerosene burners, kerosene stoves, and wood-burning stoves. | 12% | 7321 |
| Non-electric iron or steel radiators for central heating and their components. This also includes non-electric iron or steel air heaters and hot air distributors with built-in fans or blowers, and their parts. | 18% | 7322 |
| Iron and steel tables, kitchenware, and other household items, including utensils. | 12% | 7323 |
| Iron or steel wool, pot scourers, scouring or polishing pads, gloves, and similar cleaning tools. | 18% | 7323 |
| Iron and steel sanitary ware and their components. | 18% | 7324 |
| Other Cast Iron or Steel Items | 18% | 7325 |
| Other Articles of Iron or Steel | 18% | 7326 |
| Art ware of iron | 12% | 7326 90 99 |
Latest GST Rates on Steel & Iron Scraps and Powders in 2024
As per GST guidelines, Here’s the list of GST rates on steel and iron scraps and powders.
Steel and Iron Products |
GST Rate |
HSN Code |
| Granulated slag sand from the manufacture of iron or steel | 2618 | 5% |
| Slag waste from the manufacture of iron or steel | 2619 | 18% |
| Dross (other than granulated slag) waste from the manufacture of iron or steel | 2619 | 18% |
| Scalings and other waste from the manufacture of iron or steel | 2619 | 18% |
| Slag, ash and residues containing metals, arsenic or their compounds (other than from the manufacture of iron or steel) | 2620 | 18% |
| Ferrous waste of iron or steel | 7204 | 18% |
| Remelting scrap ingots of iron or steel | 7204 | 18% |
| Pig iron granules and powders | 18% | 7205 |
| Spiegeleisen granules and powders | 18% | 7205 |
| Iron granules and powders | 18% | 7205 |
| Steel granules and powders | 18% | 7205 |
Read About: List of Goods and Services Exempt Under GST in 2024
Historical GST Rates and Changes
Before GST, two main taxes were applied to the production of iron and steel before they reached the consumer. Excise duty was 12.5%, and VAT was about 5%, bringing the total tax to around 17.5%.
For interstate sales, instead of VAT, CST was charged—2% with a C-Form and 5% without it, making the tax structure complex and leading to price disparities across regions. With the implementation of GST on steel and GST on iron, these multiple taxes were subsumed into a single tax regime, providing a more straightforward and transparent tax system.
Since its inception, the steel GST rates have seen some adjustments. Initially set at 18%, certain steel items, such as kitchen utensils, were later reduced to 12%, making them more affordable for consumers. However, the core GST rate for most iron and steel products has remained at 18%.
Impact of GST Rate on Iron and Steel
The introduction of GST on steel has brought about notable changes in the pricing of various steel and iron products. For instance, kitchen utensils like stainless steel cookers, pans, spoons, and ladles have become more affordable under steel GST rates, with a reduced rate of 12% compared to the previous tax rate of 17.5%. On the other hand, items such as barbecue sets, radiators, and rods have seen a slight increase in cost under GST on steel and GST on iron at 18%, compared to the earlier rate of 17.5%.
Furthermore, the GST rate on major inputs for the iron and steel industry, such as coal, iron ore, and transportation costs has been set at a lower rate of 5%. This reduction has helped in lowering logistics and production costs, benefiting the industry overall.
Conclusion
The implementation of GST on steel and GST on iron has brought a more consistent and simplified tax structure to the iron and steel industry. While some products have become cheaper, others have seen a slight increase in cost. Overall, the unified tax rate has streamlined the taxation process, providing a balanced impact on the sector.
Frequently Asked Questions (FAQs)
1. What is the GST rate of the TMT bar?
The rate of GST on TMT bars is 18%.
2. What is the GST rate of the steel scrap?
The GST rate for steel scrap is 18%. Steel scrap is classified under the HSN code 7204.
3. How is GST calculated on the import of steel products?
Steel GST rates on the import of steel products are calculated at the applicable GST rate for the specific product, plus any customs duties if applicable. The Integrated GST (IGST) is levied on the imported goods at the time of import.
4. What is the GST rate for steel furniture?
Steel furniture attracts a GST rate of 18%. This category includes items like steel chairs, tables, and cabinets.
5. Can we claim ITC on iron and steel?
Yes, Input Tax Credit (ITC) can be claimed on iron and steel if they are used for business purposes. ITC allows businesses to reduce the tax paid on inputs from the tax payable on output.
6. What is the HSN code for iron scrap?
The HSN code for iron scrap is 7204. It is taxed at an 18% GST rate.
7. What is the GST rate for steel labour?
Steel labour, which typically includes the services provided by workers in the steel industry, is subject to an 18% GST rate. This rate applies to services such as welding, fabrication, and installation of steel products.
