Summary: On October 9, 2024, the government issued Notification No. 25/2024-CT, bringing metal scrap supplies under TDS compliance in the GST framework. Effective from October 10, 2024, any registered person receiving metal scrap falling under Chapters 72 to 81 of the Customs Tariff Act, 1975, must deduct TDS at 2% if the transaction value exceeds ₹2,50,000. These chapters cover a wide range of metals and their articles, including iron, steel, copper, aluminum, and others. The recipient, known as the “deductor,” must register separately for TDS purposes using GST Form REG-07. As per the advisory issued on October 22, 2024, taxpayers must select “Others” in the “Constitution of Business” section and enter “Metal Scrap Dealers” for compliance. The deductor is required to file a monthly TDS return in Form GSTR-7 and issue TDS certificates to suppliers in Form GSTR-7A. The supplier, or “deductee,” will receive the TDS credit in their GSTR-2A form, which will reflect in their electronic cash ledger once the return is filed. This notification aims to streamline tax collection and compliance for metal scrap dealers under GST.
Notification No. 25/2024-CT dt. 09.10.2024, issued to include any registered person receiving supplies of metal scrap falling under Chapters 72 to 81 in the First Schedule to the Customs Tariff Act, 1975 from other registered person, under TDS compliances in GST w.e.f. 10th day of October 2024.
Chapter 72 – Iron and Steel
Chapter 73 – Articles of Iron and Steel
Chapter 74 – Copper and Articles thereof
Chapter 75 – Nickel and Articles thereof
Chapter 76 – Aluminum and Articles thereof
Chapter 78 – Lead and Articles thereof
Chapter 79 – Zinc and Articles thereof
Chapter 80 – Tin and Articles thereof
Chapter 81 – Other Base Metals; Cermets; Articles thereof
TDS Rate: A TDS of 2% is required on transactions where the taxable value exceeds ₹2,50,000.
Registration Requirement: Recipient, who is called as ‘deductor’ must obtain a separate GST registration (Form REG-07) to deduct TDS.
Advisory for GST REG-07 issued dt 22.10.2024
Taxpayers in this category are required to select “Others” in Part B of Table 2 under the title “Constitution of Business” section.
This selection will open a text box where the taxpayer must enter “Metal Scrap Dealers”.
Please note that this entry is a mandatory field for those selecting “Others” in Table 2.
Once this is completed, the remaining details in the GST REG-07 form must be filled in and submitted on the common portal to comply with registration requirements.
Monthly TDS Return: Recipient (deductor) will file monthly TDS return in form GSTR -7 and issue TDS certificates in form GSTR-7A to suppliers.
TDS Credit: Supplier(deductee) will receive such TDS credits deducted by deductor in his ‘TDS Credit Received tab’ in GSTR 2A and upon filing the same, the amount of such TDS deducted will come to his electronic cash ledger.
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