Documents in a steel scrap sale in India: e-invoice, e-way bill, weighbridge slip, TCS

Short answer: A normal truck of iron and steel scrap between two GST-registered businesses carries three documents:

From our yard: MS profile melting scrap from Bhavnagar for casting foundries and MS attachment scrap: melting scrap for induction furnaces in Gujarat.

• a tax invoice at 18% GST under HSN 7204, which must be an e-invoice if the seller's aggregate turnover has exceeded ₹5 crore in any year since 2017-18;
• an e-way bill, if the consignment is worth more than ₹50,000;
• a weighbridge slip.

On top of GST, a registered buyer deducts 2% GST TDS on supplies over ₹2.5 lakh. The seller collects income-tax TCS on the sale of scrap unless the buyer gives a declaration that the scrap is for manufacturing.

This guide is general information for buyers, not tax advice. Rates and thresholds change. Confirm them with your CA before you invoice or pay.

The documents at a glance

Swipe sideways to see the whole table.

1. Tax invoice and GST rate

Iron and steel scrap falls under HSN 7204, "Ferrous waste and scrap", and is taxed at 18% GST (MBG Corporate Services). The GST rate changes recommended at the 56th GST Council meeting in September 2025 did not list scrap (GST Council press release, 3-Sep-2025).

Between two registered businesses, the seller charges GST in the normal way (forward charge).

Buying from an unregistered seller (RCM). Since 10 October 2024, when an unregistered person supplies metal scrap (chapters 72 to 81) to a registered person, the registered buyer pays the GST under reverse charge (Notification 06/2024-Central Tax (Rate), via TaxGuru).

2. E-invoice

An e-invoice is a normal GST invoice that the seller reports to the government's Invoice Registration Portal (IRP). The portal returns an IRN (Invoice Reference Number) and a signed QR code, which are printed on the invoice.

• Threshold: e-invoicing applies to registered persons whose aggregate turnover exceeds ₹5 crore. This limit has applied since 1 August 2023 (ClearTax).
• Any past year counts: the test is whether turnover exceeded ₹5 crore "in any financial year from 2017-18 onwards, not only in the current year" (Xflow).
• 30-day limit: businesses with aggregate turnover of ₹10 crore or more must report invoices to the IRP within 30 days of the invoice date, from 1 April 2025 (ClearTax, citing a GSTN advisory of 5 November 2024).

What the buyer should check: if your seller is above the limit, the invoice should carry an IRN and QR code.

3. E-way bill

An e-way bill is an electronic document for moving goods, generated on the e-way bill portal.

• Threshold: required when the consignment value exceeds ₹50,000 (ClearTax).
• Who generates it: usually the registered supplier. The transporter or the registered recipient can generate it if the supplier has not.
• Two parts: Part A holds the invoice and party details (GSTIN, invoice number, value). Part B holds the vehicle and transporter details.
• Validity: "1 day per 200 km for regular cargo", counted from the first Part B entry.
• Penalty: "Rs. 10,000 or the tax amount sought to be evaded, whichever is higher", and the goods and vehicle can be detained.
• Gujarat: no e-way bill is needed for movement within a city in Gujarat (Notification GSL/GST/RULE-138(14)/B.19, 19-Sep-2018, via TaxGuru). A truck from Alang to a furnace in another town is not intra-city.

4. Weighbridge slip

Scrap is sold by weight, so the weighbridge slip is the basis for the invoice quantity. A truck scale finds the load by "weighing the vehicle both empty and when loaded".

A good slip shows:

• the slip serial number and the weighbridge name;
• the vehicle number;
• the date and time of each weighing;
• the gross weight (loaded), tare weight (empty) and net weight.

Weighbridges are legal weighing instruments, verified and stamped by the Legal Metrology department. In Gujarat this is done on site (Gujarat Legal Metrology (Enforcement) Rules 2011, rules 16–17). Agree before loading whose slip counts: the seller's, the buyer's, or a public weighbridge.

5. GST TDS on metal scrap (2%)

From 10 October 2024, a registered person who buys metal scrap (chapters 72 to 81) from a registered supplier must deduct 2% TDS under GST when the taxable value of the supply exceeds ₹2.5 lakh. That is 1% CGST + 1% SGST within a state, or 2% IGST between states (Notification 25/2024-Central Tax, via TaxGuru).

• The buyer needs a separate TDS registration in Form GST REG-07.
• The buyer deposits the TDS and files GSTR-7 by the 10th of the following month (ClearTax).
• TDS is calculated on the taxable value, not on the GST amount.
• The seller sees the TDS in its electronic cash ledger and can use it against its GST liability.

6. Income-tax TCS on scrap

TCS (tax collected at source) is an income-tax amount that the seller adds to the invoice, collects from the buyer and deposits against the buyer's PAN. The buyer can claim it against its own income tax.

• Law: under the old Income-tax Act 1961 this was section 206C(1), at 1% on the sale of scrap. From 1 April 2026 it is in section 394(1) of the Income-tax Act, 2025 (Finance Bill 2026, Memorandum).
• Rate: the Finance Bill 2026 proposed raising TCS on scrap from 1% to 2% from 1 April 2026 (Memorandum, Clause 73). TCS rate charts for FY 2026-27 show 2% for sale of scrap, with no threshold (ClearTax, CORAA). At least one article still quotes 1%, so confirm the rate in force on your invoice date with your CA.
• Exemption with a declaration: the seller does not have to collect TCS if the buyer declares, in the prescribed manner, that the goods are for manufacture, processing or power generation (ClearTax). Under the old Act this was Form 27C (GST Refund Services). A furnace that melts the scrap uses it for manufacture; a trader who buys to resell does not.
• Budget 2025 changes: the general TCS on sale of goods (section 206C(1H)) and the higher rate for non-filers (section 206CCA) were omitted from 1 April 2025 (CORAA). They do not stack on scrap TCS any more.

A worked example (illustrative, not a price)

Suppose a registered induction furnace buys scrap with a taxable value of ₹10,00,000 from a registered seller in the same state:

1. GST at 18% = ₹1,80,000 (₹90,000 CGST + ₹90,000 SGST).
2. Invoice value before TCS = ₹11,80,000.
3. TCS: nil if the furnace has given the manufacturing-use declaration. Otherwise the seller adds TCS at the current rate; ask your CA which base to use.
4. GST TDS: the furnace deducts 2% of ₹10,00,000 = ₹20,000 when it pays, because the taxable value is above ₹2.5 lakh.

Buyer's checklist for every truck

1. The invoice shows the seller's GSTIN, HSN 7204, 18% GST, and an IRN and QR code if the seller is above ₹5 crore.
2. The e-way bill is valid and matches the invoice and the vehicle number.
3. The weighbridge slip matches the invoice quantity.
4. TCS is shown correctly, or your declaration is on file with the seller.
5. You have deducted GST TDS if the taxable value is above ₹2.5 lakh.
6. For purchases from unregistered sellers, you have paid GST under reverse charge.

At J.S. STEEL every truck load goes with a GST tax invoice (an e-invoice for GST-registered buyers), an e-way bill when the consignment requires one and a weighbridge slip, and we send photos of the exact material before every load.

Not tax advice. GST and income-tax rules change often. Confirm every rate and threshold with your chartered accountant before you invoice, deduct or pay.

Sources

• Finance Bill 2026, Memorandum explaining the provisions (Ministry of Finance)
• ClearTax: Section 394, Income-tax Act 2025
• CORAA: TCS rates FY 2026-27
• GST Refund Services: Change in TCS rate on scrap from 1 April 2026
• TaxGuru: Notification 06/2024-CT(Rate), RCM on metal scrap
• TaxGuru: Notification 25/2024-CT, TDS on metal scrap
• ClearTax: TDS on metal scrap under GST
• MBG Corporate Services: GST REG-07 for metal scrap buyers
• GST Council: 56th meeting press release, 3-Sep-2025 (PDF)
• ClearTax: E-invoicing under GST
• Xflow: E-invoice limit
• ClearTax: E-way bill rules
• TaxGuru: Gujarat intra-city e-way bill exemption
• Wikipedia: Weighbridge
• Gujarat Legal Metrology (Enforcement) Rules 2011