GST on steel bars: Tax on steel, iron and TMT steel bars in India

GST rates on steel products depend on the kind of steel product that you are looking to source. Steel products are usually under the 18% bracket or the 12% bracket. This would include GST on steel bars, GST rate on steel TMT bars, etc.

GST rates on steel products are devised by the Goods and Services Tax Council. Since the iron and steel sector are major contributors to the economic growth, the government has taken several tax measures to ensure the prosperity of the sector.

Also read: GST advantages and disadvantages for SMEs

GST rates on steel products

Have a look at the GST rates of steel products as published by the Central Board of Indirect Taxes and Customs (CBIC) along with their HSN code:

Also read: How to calculate GST with GST calculator

HSN code	Steel products	CGST Rate	SGST/UTGST Rate	IGST Rate
7204	Ferrous waste  and  scrap; remelting scrap ingots of iron or steel	9%	9%	18%
7205	Granules    and    powders, of    pig    iron, spiegeleisen, iron or steel	9%	9%	18%
7206	Iron and non-alloy steel in ingots or other primary forms  (excluding iron  of  heading 7203)	9%	9%	18%
7207	Semi-finished   products  of   iron  or   non- alloy steel	9%	9%	18%
7208 to 7212	All  flat-rolled  products  of  iron  or  non- alloy steel	9%	9%	18%
7213 to 7215	All bars and rods, of iron or non-alloy steel	9%	9%	18%
7216	Angles, shapes and sections of iron or non- alloy steel	9%	9%	18%
7217	Wire of iron or non-alloy steel	9%	9%	18%
7218	Stainless  steel  in  ingots  or  other  primary forms;  semi-finished  products  of  stainless steel	9%	9%	18%
7219, 7220	All flat-rolled products of stainless steel	9%	9%	18%
7221, 7222	All bars and rods, of stainless steel	9%	9%	18%
7223	Wire of stainless steel	9%	9%	18%
7224	Other alloy steel in ingots or other primary forms;   semi-finished   products   of   other alloy steel	9%	9%	18%
7225, 7226	All flat-rolled products of other alloy steel	9%	9%	18%
7227, 7228	All bars and rods of other alloy steel	9%	9%	18%
7229	Wire of other alloy steel	9%	9%	18%
7301	Sheet piling of iron or steel, whether or not drilled,  punched  or  made  from assembled elements;    welded    angles,    shapes    and sections, of iron or steel	9%	9%	18%
7302	Railway   or   tramway   track   construction material of iron or steel, the following: rails, checkrails and   rack   rails, switch blades, crossing frogs, point rods and other crossing pieces, sleepers (crossties), fish- plates, chairs, chair wedges, sole plates (base plates), rail clips bedplates, ties and other material  specialised for jointing or fixing rails	9%	9%	18%
7304	Tubes, pipes      and hollow     profiles, seamless, of iron (other than cast iron) or steel	9%	9%	18%
7305	Other   tubes   and   pipes (for   example, welded, riveted    or    similarly    closed), having circular cross‑sections, the external diameter of whichexceeds 406.4 mm, of iron or steel	9%	9%	18%
7306	Other tubes, pipes and hollow profiles (for example, open seam or welded, riveted or similarly closed), of iron or steel	9%	9%	18%
7307	Tube    or    pipe    fittings (for    example, couplings, elbows, sleeves), of iron or steel	9%	9%	18%
7318	Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter-pins, washers (including   spring   washers)  and   similar articles, of iron or steel	9%	9%	18%

Also read: What are the tax benefits on a business loan?

For a full list of GST rates on steel items please visit the CBIC website.

From the above table you can note that all the steel products come under the GST bracket of 18%. State and the central government tax for steel products is 9% each.

Given below is an explanation of the terms given in the table above for better understanding:

• CGST

CGST is Central Goods and Services Tax and is a tax levied on intrastate supplies of goods and services by the Central Government.

• SGST

SGST is State Goods and Services Tax which is the tax to be given to the state government. Under GST, SGST is collected on intrastate supplies of goods and services and the SGST tax rate is equal to CGST tax rate collected. This is collected along with CGST.

• UTGST

UTGST stands for the Union Territory Goods and Services Tax. It is the goods and services tax levied by the governments in Union Territories. Union Territories of Delhi and Puducherry fall under SGST law as they have their own legislature.

• IGST

IGST is Integrated Goods and Services Tax, levied on all interstate supplies of goods and/or services. It is applicable to imports and exports.

GST on steel bars

If you look at the table above you can see three different types of steel bars mentioned:

• All bars and rods of iron or non-alloy steel (Also read: Iron rod – Prices, uses, type)
• All bars and rods of stainless steel
• All bars and rods of other alloy steel

All these categories belong to the same tax bracket of 18%. Therefore, interstate supply of TMT steel bars is charged an 18% IGST and intrastate supply is also charged 18%. This is divided equally between the central and the state governments.

Importance of HSN code

The full form of HSN is Harmonised System of Nomenclature code. This is a 6-digit code that classifies various products. Manufacturers and suppliers indicate HSN code on their tax invoices and exporters and importers mention these codes in their import and export documents.

HSN classification is used for tax purposes to identify the rate of tax applicable to a specific product. This makes GST filing easy for businesses as a code for products eliminates the need of entering details of the products.

Businesses with a turnover of less than ₹1.5 Crore do not need to adopt HSN codes for their commodities. Companies with turnover between ₹1.5 crore and ₹5 Crore use two-digit HSN codes for their commodities.

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Also read: Tax benefits and incentives for MSMEs in India