Plastic scrap purchases: GST TDS and reverse charge apply from 1 November

Notifications dated 27 October 2026 bring plastic waste and scrap under HSN 3915 into expanded GST TDS and reverse-charge arrangements from 1 November 2026. The final Gazette contains the operative notifications; these are notified changes, not merely Council recommendations.

Registered supplier: Notification 07/2026-Central Tax, G.S.R. 935(E), covers registered buyers receiving specified scrap from another registered person. Under section 51, GST TDS generally totals 2% where taxable supplies under a contract exceed ₹2.5 lakh, excluding GST and cess. Check statutory exceptions, including the supplier-location/place-of-supply condition. This is a contract threshold, not an annual-turnover or individual-invoice threshold. The supplier continues to charge applicable GST under forward charge.

Unregistered supplier: Notification 04/2026-Central Tax (Rate), G.S.R. 927(E), inserts plastic scrap into the reverse-charge table. The registered buyer pays applicable GST; the ₹2.5 lakh TDS threshold does not limit this RCM entry. The corresponding Integrated Tax notification, G.S.R. 928(E), covers the specified inter-State arrangement.

A covered ₹3 lakh registered-supplier contract therefore involves ₹6,000 GST TDS on taxable value. Purchases from an unregistered supplier require RCM assessment instead.

Verify supplier GSTINs and HSNs, separate purchases by supplier status, obtain deductor registration where required and complete GSTR-7 compliance. Review RCM payment, documentation and eligible credit separately.

GST TDS is distinct from Income-tax TDS/TCS. Proprietorship status or absence of an income-tax audit does not create a GST exemption. Finished plastic granules need their own classification; these scrap entries do not automatically cover every plastic product.