Metal scrap dealers shall obtain GST Registration-CGST Notification dated 09.10.2024!

In a recent update to the Goods and Services Tax (GST) regulations, the Central Government has mandated that metal scrap dealers must now obtain GST registration. This requirement is outlined in the CGST Notification dated October 9, 2024, which targets metal scrap dealers. This regulatory change is set to significantly impact the scrap metal industry, emphasizing the importance of GST compliance and formal registration under the GST regime. 

Let’s understand the notification in detail!

Notification No. 24/2024-Central Tax dated 09^th October 2024

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GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

New Delhi: 09.10.2024

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Notification No. 24/2024-Central Tax:

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G.S.R. 628(E).- 1. In exercise of the powers conferred by sub-section (2) of section 23 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, at this moment makes the following amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue) No. 5/2017- Central Tax, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R. 607(E), dated the 19th June, 2017, namely: -

In the said notification, after the opening paragraph, the following proviso shall be inserted, namely: -

"Provided that nothing contained in this notification shall apply to any person engaged in the supply of metal scrap, falling under Chapters 72 to 81 in the first schedule to the Customs Tariff Act, 1975 (51 of 1975)."

2. This notification shall come into force with effect from the 10th day of October 2024.

[F No. CBIC-190354/149/2024-TO(TRU-II)]

AMREETA TITUS, Dy. Secy.

Key Highlights

• Section 23 of the CGST Act, 2017 covers provisions related to Persons not liable for registration. It’s sub-section 2 states that the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, specify the category of persons who may be exempted from obtaining registration under this Act.
• Accordingly, CBIC has issued Notification No. 5/2017 - Central Tax dated 19.06.2017 which states that the persons who are only engaged in making supplies of taxable supplies, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services u/s 9(3), they are exempt from obtaining registration under GST.
• However, by inserting a proviso in this notification, the Central Government has mandated that metal scrap dealers must obtain GST registration.
• This amendment is effective from 10^th October, 2024.

Conclusion

The recent CGST Notification mandating GST registration for metal scrap dealers marks a significant shift in regulatory compliance within the industry. By enforcing this requirement, the government aims to enhance transparency, reduce tax evasion, and ensure that all players in the metal scrap market contribute fairly to the national revenue. Metal scrap dealers should take immediate steps to understand the registration process and adhere to the new regulations to avoid penalties and ensure smooth operations. Embracing this change not only aligns dealers with legal requirements but also promotes a more organized and accountable business environment in the metal scrap sector. As the industry evolves, staying informed and compliant will be crucial for long-term success.

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