Wholesale and trading

GST invoice format for a scrap dealer (kabadi / metal scrap trader)

A scrap dealer's GST invoice must cope with rules written specifically for this trade: reverse charge when metal scrap is bought from unregistered collectors, 2% GST TDS deducted by registered buyers of metal scrap, and income-tax TCS on scrap sales. Beyond the standard fields, show the scrap grade, weighbridge weight and slip number, vehicle number, whether tax is payable under reverse charge, and separate lines for ferrous scrap, non-ferrous scrap, waste paper and plastic scrap because their rates differ.

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Sample scrap dealer invoice

Description	HSN/SAC	Qty	Rate (₹)	Taxable (₹)	GST
Heavy melting scrap (HMS 1 and 2), iron and steel	7204	8.36 MT	31,500.00	2,63,340.00	18%
Copper wire scrap (berry / birch grade)	7404	240 KGS	690.00	1,65,600.00	18%
Aluminium utensil scrap	7602	380 KGS	168.00	63,840.00	18%
Old corrugated cartons (waste paper)	4707	2600 KGS	14.50	37,700.00	5%
HDPE plastic scrap, sorted	3915	900 KGS	38.00	34,200.00	18%
Taxable value				₹5,64,680.00
GST (CGST + SGST, or IGST if inter-state)				₹96,741.40
Invoice total				₹6,61,421.40

Sample prices are illustrative. Check the GST rate for your exact item or service before billing.

Extra fields a scrap dealer invoice needs

Scrap grade and composition: HMS 1, HMS 2, turnings, copper berry, aluminium utensil scrap and old corrugated cartons each price differently. A clear grade on the line is what the furnace or mill checks against its purchase order.
Weighbridge weight and slip number: Scrap is always sold on weight. Gross, tare and net weight with the slip number back the quantity billed and resolve the moisture and dust deductions mills apply on arrival.
Reverse charge indicator: When you, as a registered dealer, buy metal scrap from an unregistered seller, you pay the tax under reverse charge. Your purchase document must state that tax is payable on reverse charge, and your sale invoice should say whether reverse charge applies.
GST TDS deducted by buyer: Registered buyers of metal scrap now deduct 2% GST TDS on taxable value above the notified limit. A field showing the expected TDS helps you reconcile the short receipt with the credit appearing in your electronic cash ledger.
Source of scrap: Mills and recyclers increasingly ask whether scrap came from demolition, factory offcuts or household collection. A source note supports their environmental records and their own GST due diligence on genuine supply.
Vehicle and e-way bill: Scrap movements are a focus of road checks. The vehicle number and e-way bill number on the invoice show the load was documented from yard to mill.

Standard GST invoice fields

Rule 46 of the CGST Rules applies to every tax invoice, including this one:

Supplier name, address and GSTIN
Consecutive invoice number (max 16 characters, unique for the year)
Date of issue
Customer name, address and GSTIN (if registered)
Place of supply with state name
HSN/SAC code per item
Description, quantity and unit
Taxable value after discounts
GST rate and CGST + SGST or IGST amounts
Signature or digital signature

GST rules that matter for a scrap dealer

Reverse charge on metal scrap bought from unregistered sellers

From 10 October 2024, Notification 6/2024-Central Tax (Rate) placed supplies of metal scrap falling in chapters 72 to 81 by an unregistered person to a registered person under reverse charge. A scrap yard buying iron or copper scrap from small kabadi collectors without GSTIN must therefore pay the GST itself, issue a self-invoice for those purchases and a payment voucher to the seller, and can then claim that tax as input tax credit. Waste paper and plastic scrap are outside this particular notification, so their purchases from unregistered sellers do not attract this reverse charge.

2% GST TDS on registered metal scrap supplies

Notification 25/2024-Central Tax made registered persons who receive metal scrap of chapters 72 to 81 liable to deduct TDS under section 51 at 2% (1% CGST plus 1% SGST, or 2% IGST) where the value of supply under a contract exceeds Rs 2.5 lakh. As a seller, you still charge full GST on your invoice; the buyer deducts TDS from the payment, files GSTR-7 and the amount reaches your electronic cash ledger. Missing that reconciliation leaves your receivable looking short-paid.

Rates after September 2025

Ferrous waste and scrap (7204), copper waste and scrap (7404), aluminium waste and scrap (7602) and plastic waste and scrap (3915) appear in the 18% schedule of Notification 9/2025, while recovered waste paper and paperboard (4707) is in the 5% schedule. A dealer handling mixed scrap must split each grade onto its own line. Mixed loads billed as 'misc scrap' at one rate are the first thing an officer questions during a yard inspection.

Income-tax TCS and the fake-invoice risk

Under section 206C(1) of the Income-tax Act, a seller of scrap collects tax at source at 1% from the buyer, unless the buyer uses the scrap for manufacturing and gives a declaration. Separately, the scrap trade has seen many GST fraud cases built on invoices without goods. Keep weighbridge slips, vehicle photos and e-way bills for every sale and purchase; they are your proof that real material moved if a supplier's registration is later cancelled.

Common billing mistakes

Not issuing a self-invoice and paying reverse charge on iron scrap bought from unregistered collectors after October 2024.
Billing 'mixed scrap' at a single rate when the load contains waste paper at 5% and metal at 18%.
Treating the 2% TDS deducted by the mill as a bad debt instead of claiming it from the electronic cash ledger.
Accepting purchase invoices from a supplier with no yard or vehicle, which exposes you to credit denial when that GSTIN is cancelled.

Scrap dealer GST invoice: FAQ

Is GST on iron scrap under reverse charge?

Only when a registered person buys metal scrap of chapters 72 to 81 from an unregistered supplier, per Notification 6/2024-CT(Rate). When a registered scrap dealer sells to a registered mill, normal forward charge applies and the mill deducts 2% TDS.

What is the GST rate on waste paper?

Recovered waste or scrap of paper or paperboard under heading 4707 is in the 5% schedule from 22 September 2025.

Do I need an e-way bill for a scrap load?

Yes, whenever the consignment value exceeds Rs 50,000, and also for job-work movements regardless of value. Metal scrap loads cross that limit easily, so generate one for every truck.

What should a self-invoice for unregistered purchases show?

Your details as recipient, the unregistered supplier's name and address, description, HSN, weight, value, tax payable under reverse charge, and a statement that tax is payable on reverse charge. Issue a payment voucher when you pay the seller.

Sources: CBIC — Notification 9/2025-Integrated Tax (Rate), dated 17-9-2025 (goods rate schedules) · GST Council — PIB press release on the 56th GST Council recommendations

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