A new GST framework for specified waste and scrap has applied from 1 November 2026. Who pays the tax now depends on whether the supplier is registered. A registered buyer may have to pay GST under reverse charge, deduct GST TDS, or neither, depending on the supplier and the goods. Suppliers who were relying on a special registration exemption have lost it.

The changes were recommended by the GST Council in its 57th meeting held on 8 October 2026 and were notified on 27 October 2026, with effect from 1 November 2026. This article explains the three notifications that matter for the waste and scrap trade, and what buyers, sellers and their advisors should do.

1. The three notifications at a glance

All three take effect from 1 November 2026.

2. Which goods are covered?

3. Buying from an unregistered supplier: reverse charge

Where a registered person buys any of the four new goods from an unregistered person, the registered buyer pays the GST under reverse charge from 1 November 2026. The GST Council's recommendation states that the registered recipient will be liable to pay GST even if the supplier has not crossed the registration threshold.

Points the buyer should handle:

• Self-invoice: a registered person liable under reverse charge for supplies from an unregistered person must issue a self-invoice under section 31(3)(f). Rule 47A requires it within 30 days of receipt of the supply.
• Payment voucher: issue a payment voucher at the time of payment under section 31(3)(g).
• Time of supply: determine it under section 12(3) for goods under reverse charge.
• Payment in cash: tax under reverse charge is paid through the Electronic Cash Ledger and cannot be set off against ITC.
• ITC: ITC of the reverse charge tax paid is available only if the normal conditions of sections 16 and 17 are met. Paying reverse charge does not by itself make the credit eligible.
• Coming up: registered persons with aggregate turnover above Rs. 5 crore will have to generate an e-invoice (IRN) for such self-invoices from 1 January 2027 (Notification No. 04/2026-Central Tax dated 26.10.2026).

4. Buying from a registered supplier: GST TDS

A purchase from a registered supplier is not a reverse charge transaction merely because it involves scrap. The registered supplier charges GST on forward charge as usual. In addition, from 1 November 2026, the registered buyer must deduct GST TDS under section 51 where its conditions are met:

• the total value of taxable supply under a contract exceeds Rs. 2,50,000, excluding GST and cess;
• TDS is 2%: 1% CGST + 1% SGST/UTGST for intra-State supplies, or 2% IGST for inter-State supplies, on the value excluding tax;
• no deduction is made where the location of the supplier and the place of supply are in a State or Union territory different from the buyer's State or Union territory of registration (proviso to section 51(1)).

A buyer required to deduct must register as a tax deductor in FORM GST REG-07 (unless already registered as a deductor), deduct at the time of payment or credit, and file GSTR-7 by the 10th of the following month. For deductions made in November 2026, the first GSTR-7 is due by 10 December 2026. The supplier gets the deducted amount in its Electronic Cash Ledger after accepting it in the "TDS and TCS Credit Received" form on the portal.

5. Reverse charge and TDS are different

Reverse charge: the registered buyer pays the tax instead of the unregistered supplier. GST TDS: the registered buyer deducts 2% from the payment to a registered supplier and deposits it; the supplier still charges and pays its own GST and gets the TDS as cash ledger credit. The two are not interchangeable.

6. Must every small scrap supplier register now?

No blanket conclusion should be drawn. Notification No. 5/2017-Central Tax exempts from registration a person whose supplies are all taxable under reverse charge, whatever its turnover. Notification 06/2026-Central Tax withdraws that exemption for suppliers of the five categories from 1 November 2026.

The effect is that such a supplier must now examine its registration liability under the normal provisions, mainly the turnover threshold and any compulsory registration ground. The GST Council's recommendation distinguished the two situations: the registered buyer pays reverse charge even where the supplier is below the threshold, and the supplier must obtain registration on crossing the threshold. A supplier already above the threshold that was relying only on the reverse charge exemption should take advice on registration now.

7. A simple illustration

A registered plastic recycling unit receives two consignments of plastic waste on 2 November 2026:

• Consignment 1 from a GST-registered dealer, under a contract of Rs. 4,00,000 (excluding GST), intra-State. The dealer charges GST. The recycler deducts GST TDS of Rs. 8,000 (1% CGST + 1% SGST) at payment and files GSTR-7.
• Consignment 2 from an unregistered collector. The recycler issues a self-invoice and payment voucher, and pays the GST under reverse charge in cash.

The material is similar, but the GST treatment is different. A single accounting treatment for all scrap purchases is therefore not appropriate. This is a hypothetical illustration; the actual position depends on the documents and classification.

8. Transactions around 1 November 2026

Where the invoice, receipt of goods and payment fall on different sides of 1 November 2026, examine each transaction separately. Reverse charge liability depends on the time of supply under section 12(3). GST TDS is linked to the payment made or credited to the supplier. Do not assume that a purchase is outside the new rules only because the goods were ordered earlier, or inside them only because payment is made later; check the facts and take advice.

9. Action points for buyers, recyclers and industrial users

1. 1Tag every supplier as registered or unregistered.Immediately
   Verify GSTIN status on the portal for the transaction date. The supplier's status decides whether reverse charge or TDS applies.
2. 2Map your purchases to tariff headings.Immediately
   Separate waste and scrap under 1518, 3915, 4004, 8549 and Chapters 72 to 81 from processed or reusable goods. Record the reasoning.
3. 3Set up reverse charge in your accounts.Immediately
   Create reverse charge ledgers, self-invoice and payment voucher series, and a monthly cash payment process. Report the liability correctly in GSTR-3B.
4. 4Register as a TDS deductor if needed.Before first payment
   If you buy these goods from registered suppliers above the Rs. 2,50,000 contract threshold, obtain registration in REG-07 and set up 2% TDS in your payment process.
5. 5File GSTR-7 for November 2026 by 10 December 2026.December 2026
   Report deductions invoice-wise and deposit the TDS on time.
6. 6Prepare for e-invoicing of self-invoices.Before 1 January 2027
   If your aggregate turnover exceeds Rs. 5 crore, plan for IRN generation on reverse charge self-invoices.
7. 7Review ITC on reverse charge purchases.Ongoing
   Take ITC of reverse charge tax only where sections 16 and 17 permit, and keep the self-invoice and payment proof.

10. Action points for suppliers, collectors and aggregators

1. 1Check your registration position now.Immediately
   The reverse charge registration exemption no longer applies to you. If your turnover is above the applicable threshold, take advice on registration.
2. 2If registered, expect TDS from registered buyers.Monthly
   Accept the TDS in the "TDS and TCS Credit Received" form each month so that it reaches your cash ledger, and plan for the change in cash flow.
3. 3Give buyers correct details.Ongoing
   Share your GSTIN or unregistered status clearly, and describe the goods accurately on invoices or delivery documents.

11. Action points for GST professionals

1. 1Identify affected clients.
   List clients who buy or sell used cooking oil, plastic and tyre waste, e-waste and metal scrap, including restaurants and hotels selling used oil and electronics businesses disposing of e-waste.
2. 2Read the notifications with the State notifications.
   Check the corresponding State Tax (Rate) and State Tax notifications for intra-State supplies before advising.
3. 3Settle classification in writing.
   For each material, record the heading and the reason. Classification disputes will decide whether reverse charge or TDS applies at all.
4. 4Plan deductor registrations and GSTR-7 filing.
   Ensure REG-07 registrations are in place before the first deduction and that the November 2026 GSTR-7 is filed by 10 December 2026.
5. 5Advise suppliers on registration timing.
   Examine turnover and the date of crossing the threshold, and the 30-day time for applying under section 25(1).
6. 6Review cut-over transactions.
   Examine time of supply and payment dates for transactions spanning 1 November 2026.

12. Five-minute self-check

Ask your purchase or accounts manager to answer YES, NO or NOT SURE:

A NO or NOT SURE does not by itself mean there is non-compliance. It marks a transaction for review.

13. Documents to keep ready

• Supplier master: GSTIN or unregistered status, with the date of verification.
• Purchase orders and contracts: goods description, quantity, value and terms.
• Tax invoices from registered suppliers, and self-invoices and payment vouchers for reverse charge purchases.
• Classification working: heading for each material and the reasoning.
• Reverse charge records: computation, cash payment and GSTR-3B reporting.
• TDS records: REG-07 registration, deduction working, GSTR-7 and GSTR-7A.
• Ledgers: Electronic Cash Ledger, Electronic Credit Ledger and ITC working, reconciled separately.

14. Official sources

1. Notification No. 04/2026-Central Tax (Rate) dated 27 October 2026 (G.S.R. 927(E)), amending Notification No. 4/2017-Central Tax (Rate); with Notification No. 04/2026-Integrated Tax (Rate) and No. 04/2026-Union Territory Tax (Rate) of the same date.
2. Notification No. 06/2026-Central Tax dated 27 October 2026 (G.S.R. 934(E)), amending Notification No. 5/2017-Central Tax under section 23(2).
3. Notification No. 07/2026-Central Tax dated 27 October 2026 (G.S.R. 935(E)), amending Notification No. 50/2018-Central Tax under section 51.
4. Notification No. 04/2026-Central Tax dated 26 October 2026, on e-invoicing of reverse charge self-invoices from 1 January 2027.
5. Earlier metal scrap changes: Notification No. 06/2024-Central Tax (Rate) dated 8 October 2024, and Notification Nos. 24/2024-Central Tax and 25/2024-Central Tax dated 9 October 2024.
6. CGST Act, 2017: sections 9(3), 12(3), 16, 17, 23(2), 25(1), 31(3)(f) and (g), and 51; CGST Rules, 2017: rules 47A and 66.
7. Press release on the recommendations of the 57th GST Council meeting, 8 October 2026.

The notifications are available on taxinformation.cbic.gov.in and cbic-gst.gov.in, and the Council's press release on gstcouncil.gov.in. Council recommendations have been referred to only as background; the legal position is as notified.

Scope of this article: the article explains the general framework from 1 November 2026. GST rates on the goods, State notifications and individual transactions have not been examined.

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