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Gst on boxes discarded as scrap

RCM 599 views 1 replies

GST Registered Trader selling empty cardboard boxes as scrap, shall it attract RCM under GST.

Note: Trader is not a scrap dealer, he is trading some consumables, empty carton boxes of consumables are discarded as scrap by selling those boxes to local scrap buyers.

Replies (1)

As per GST regulations, selling empty cardboard boxes as scrap may attract Reverse Charge Mechanism (RCM) under certain conditions.

 Here's a breakdown:

1. *Classification*: Empty cardboard boxes are classified as "waste and scrap" under GST. 

2. *RCM applicability*: If the trader is not a scrap dealer but is selling scrap generated from their business operations, RCM might not apply. 

3. *Threshold exemption*: If the value of scrap sold is below the threshold limit (currently ₹5 lakhs), RCM is not applicable. 

4. *GST rate*: If RCM applies, the GST rate would be 5% (2.5% CGST + 2.5% SGST)..  -

 RCM applicability - Threshold exemption - Compliance requirements Remember, GST regulations can change, so stay updated and consult a tax expert for personalized advice.


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