Understand GST on steel in India, including applicable rates, impact on pricing, input tax credit, and industry benefits. Learn how GST affects manufacturers, traders, and consumers.
Steel GST Rate in India varies based on the type of steel product. GST on steel is generally 18%, covering most steel items like bars, rods, and flat-rolled products. As steel forms the backbone of industries like construction and manufacturing, understanding its GST rate is essential for compliance in India’s growing infrastructure sector.
What is the GST on Steel and Iron?
The GST on Steel and Iron in India is 18% for most products, including bars, rods, and flat-rolled items. However, specific items like iron ore attract 5% GST. These rates ensure streamlined taxation for the steel and iron industry.
Latest GST Rates on Steel & Iron Products
Below is the latest GST rate table for iron and steel products as per the existing rates, incorporating any updates or additions where applicable:
| Iron & Steel Description | HSN Code | GST Rate |
| Pig iron and spiegeleisen in primary forms | 7201 | 18% |
| Ferroalloys | 7202 | 18% |
| Iron and non-alloy steel in ingots or other primary forms | 7206 | 18% |
| Semi-finished products of iron or non-alloy steel | 7207 | 18% |
| Flat-rolled products of iron or non-alloy steel | 7208 – 7212 | 18% |
| Bars, rods, and angles of iron or non-alloy steel | 7213 – 7215 | 18% |
| Stainless steel in ingots or other primary forms | 7218 | 18% |
| Flat-rolled products of stainless steel | 7219 – 7220 | 18% |
| Bars and rods of stainless steel | 7221 – 7222 | 18% |
| Alloy steel in ingots or other primary forms | 7224 | 18% |
| Flat-rolled products of alloy steel | 7225 – 7226 | 18% |
| Railway or tramway track construction materials | 7302 | 18% |
| Articles of iron or steel (screws, bolts, nuts, etc.) | 7318 | 18% |
| Wire of iron or non-alloy steel | 7217 | 18% |
Updates
- The GST rate for most iron and steel products remains at 18%.
- Iron ore and concentrates (HSN Code 2601) are taxed at a reduced rate of 5%.
This structured GST rate list ensures clarity for manufacturers, traders, and end-users in the iron and steel sector.
Impact of GST on Iron and Steel
What is GST and its Purpose?
The Goods and Services Tax (GST), implemented in India in 2017, is a comprehensive indirect tax system designed to unify and simplify the country’s taxation structure. It replaced multiple indirect taxes like excise duty, VAT, and entry taxes, creating a streamlined tax framework for industries. For the iron and steel sector, GST has significantly reduced tax complexities and improved compliance.
GST Rates on Steel Products
As of now, most steel products are subject to an 18% GST rate, including items such as bars, rods, flat-rolled products, and ingots. This standardized rate replaced the pre-GST regime’s multiple taxes, including excise duty (12.5%) and VAT (5%-15%, varying by state).
How GST Influences Steel Pricing
Input Tax Credit (ITC):
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- Under GST, manufacturers can claim ITC on taxes paid for inputs like raw materials and machinery. This reduces the overall tax burden.
- As a result, production costs have decreased, which benefits manufacturers and stabilizes prices for consumers.
Comparison of Pre-GST and Post-GST Prices:
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- Pre-GST Era: Steel prices were inflated due to cascading taxes, such as excise duty and state-wise VAT. Additionally, entry taxes and octroi added further costs, varying regionally.
- Post-GST Era: The uniform 18% tax rate and ITC availability have eliminated cascading taxes, reducing overall costs. However, market demand and raw material prices continue to influence final product pricing.
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Broader Implications for the Steel Industry
- Manufacturers:
- Simplified compliance with centralized GST rules reduces administrative costs.
- ITC benefits lower production costs, making Indian steel globally competitive.
- Consumers:
- GST has brought more transparent pricing as taxes are directly visible in invoices.
- Reduced tax-on-tax effects have stabilized steel prices over time.
- Exporters:
- GST refunds on exports and ITC on inputs enhance export competitiveness.
- Simplified tax filings under GST improve the ease of doing business internationally.
- Supply Chain Dynamics:
- Removal of entry taxes and check-post delays has optimized logistics, reducing transportation costs and delivery times.
- Centralized taxation enables better inventory and supply chain management for manufacturers.
Benefits of GST for the Iron and Steel Sector
- Improved Competitiveness: Lower tax burdens and streamlined compliance have strengthened the industry’s global standing.
- Ease of Doing Business: Unified tax rules enhance efficiency and attract investments in the sector.
- Reduced Costs: ITC ensures reduced production costs, benefiting both manufacturers and end-users.
FAQs About GST on Steel
Is there GST on iron and steel scrap?
Yes, GST is applicable on iron and steel scrap at a rate of 18%. This rate applies uniformly across the country to promote compliance and transparency in the recycling sector.
What is the GST rate of steel?
The GST rate on steel is 18% for most steel products, including bars, rods, and flat-rolled items. This rate has been in effect since the introduction of GST in 2017.
What is the GST rate on TMT bars?
The GST rate on TMT bars (Thermo-Mechanically Treated bars) is 18%. These bars are commonly used in construction, and the rate applies to both manufacturing and trading activities.
What is the GST rate on steel utensils?
Steel utensils attract a GST rate of 12%. This applies to stainless steel utensils used in households and commercial kitchens.
What is the GST rate on iron rods?
The GST rate on iron rods is 18%, which includes both non-alloy and alloy variants used in construction and infrastructure projects.
