GST on Waste and Scrap (2026): 2% TDS and Reverse Charge for Plastic, Tyre, E-waste and Used Cooking Oil
CA Meet Dhrangadhariya 
October 19, 2026
CA Meet Dhrangadhariya October 19, 2026
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Last updated: 19 October 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP
Quick summary
Recyclers, scrap dealers and the manufacturers who buy from them have dealt with metal scrap under a special GST regime since the 54th Council. The 57th Council has now recommended extending that regime to four more categories of waste. The detail is in the PIB FAQs on goods of 09/10/2026, read with the press release of 08/10/2026.
These are recommendations of the Council. They apply only once implemented through notifications and circulars, which will be uploaded on the CBIC website. The FAQ itself carries a disclaimer that its answers are for guidance and have no legal validity.
The recommendation covers:
The FAQ explains that this is built on the framework already in place for metal scrap, introduced on the recommendation of the 54th GST Council:
If you already comply for metal scrap, the four new categories will feel familiar.
| Situation | Who supplies | Who receives | What applies |
|---|---|---|---|
| Registered to registered | Registered person | Registered person | The buyer deducts TDS at 2% from the payment and deposits it with the Government |
| Unregistered to registered | Unregistered person | Registered person | Reverse charge: the registered buyer pays the GST |
The FAQ describes only these two situations. It does not address other combinations, so wait for the notification before assuming how they are treated.
If the supplier is unregistered and below the registration threshold, the registered recipient still pays GST under reverse charge. The FAQ is direct about this: the recipient pays even if the unregistered supplier is below the threshold limit.
The supplier’s own obligation is separate. A supplier must take registration when aggregate turnover crosses the threshold under section 22 of the CGST Act. Once it has, the TDS provisions apply to its later supplies to registered persons.
So the position for a registered buyer is simple to state and easy to underestimate. Buying these four categories from small unregistered collectors creates a tax liability for you, whatever the collector’s size.
The FAQ lists three obligations for the recipient:
The goods FAQ covers several unrelated classification points. In summary:
| Item | Position stated in the FAQ |
|---|---|
| Sea-weed extract based bio-stimulants | Those registered under Schedule VI to the Fertiliser (Inorganic, Organic or Mixed) (Control) Order, 1985 are classifiable under heading 3101 as fertilisers (S. No. 237 of Schedule I of Notification No. 9/2025-Central Tax (Rate)). Past cases to be regularised on an “as is where is” basis |
| Sea-weed extract products generally | Not all of them fall under that entry. Only registered bio-stimulants do |
| Sea-weed extract products containing Plant Growth Regulators | Do not qualify as bio-stimulants under the Fertiliser Control Order and so are not classified under that entry |
| Toys | The toy entries (S. No. 497 of Schedule I and S. No. 616 of Schedule II of the same notification) cover all categories of toys in chapter heading 9503, such as dolls, puzzles and other toys, and not only tricycles, pedal cars and scooters |
| Sublimation paper | Classifiable under heading 4809 (Sr. No. 176 of Schedule II). Past period to be regularised on an “as is where is” basis |
| Retreaded tractor tyres | The anomaly is to be corrected by aligning the GST rate with that on new tractor tyres |
| Psyllium seeds (Isobgul/Isobgol) | A separate entry to be created in Notification No. 10/2025-Central Tax (Rate), at nil rate, whether fresh, chilled, frozen or dried |
| Second-hand car dealers | The concessional margin scheme rate is not lost merely because ITC is availed on repair and maintenance services, spares and other inputs used in the business. ITC cannot be availed on the tax paid on purchase of the second-hand vehicles themselves if the dealer opts for the margin scheme |
We can map your scrap and waste transactions against the proposed TDS and reverse charge regime, set up GSTR-7 deduction and certificate processes, advise on classification questions such as bio-stimulants, sublimation paper or retreaded tyres, and prepare for the notification once it is issued. Please reach out to our team and we will be happy to assist.
Waste and scrap of plastics, waste and scrap of tyres, electrical and electronics waste and scrap, and used cooking oil, as recommended by the 57th GST Council.
When a registered person supplies the specified waste or scrap to another registered person. The buyer deducts 2% from the payment and deposits it with the Government.
When an unregistered person supplies the specified waste or scrap to a registered person. The liability to pay GST shifts to the registered buyer.
Yes. The FAQ states that the registered recipient must pay GST under reverse charge even where the unregistered supplier is below the threshold limit.
The buyer deducts TDS on purchases from registered suppliers and files Form GSTR-7, issues a TDS certificate to the supplier, and pays GST under reverse charge on purchases from unregistered suppliers, reporting it in the return.
No. It is a recommendation of the 57th GST Council. It will be implemented by notifications and circulars uploaded on the CBIC website.
This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.
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