Aluminium GST Rate & HSN Code (Chapter 76): The Expert Guide

Understanding the Goods and Services Tax (GST) implications on aluminium is crucial for businesses involved in its manufacturing, trading, and consumption. This comprehensive guide delves into the specifics of Chapter 76, focusing on the relevant HSN codes and applicable GST rates for various forms of aluminium in India. We will explore the different categories within Chapter 76, providing clarity and actionable insights to ensure compliance and informed decision-making.

What is Chapter 76 and its Scope?

Chapter 76 of the HSN code classification pertains to Aluminium and articles thereof. It encompasses a wide range of products, from raw aluminium to finished goods. This chapter is further subdivided into specific headings based on the form and processing stage of the aluminium. Understanding these subdivisions is critical for correctly identifying the applicable HSN code and subsequently, the correct GST rate.

Key Products Covered Under Chapter 76:

• Unwrought Aluminium (e.g., ingots, billets, and sows)
• Aluminium Waste and Scrap
• Aluminium Powders and Flakes
• Wrought Aluminium (e.g., plates, sheets, strips, foil, bars, rods, profiles, tubes, and pipes)
• Aluminium Structures and Parts Thereof
• Aluminium Reservoirs, Tanks, Vats, and Similar Containers
• Aluminium Stranded Wire, Cables, Plaited Bands and the Like
• Other Articles of Aluminium

Current Aluminium GST Rate in India

As of the latest updates, the GST rate applicable to most aluminium products falling under Chapter 76 is 18%. However, it’s crucial to note that certain specific items or classifications might have varying rates. Always refer to the official GST tariff notifications from the Central Board of Indirect Taxes and Customs (CBIC) for the most accurate and up-to-date information. It is also advisable to consult with a tax professional.

Official Source: The official GST portal (gst.gov.in) and the CBIC website (cbic.gov.in) are the primary sources for verifying the latest GST rates and notifications.

Detailed Breakdown of HSN Codes Under Chapter 76

To navigate the complexities of GST on aluminium, understanding the specific HSN codes is paramount. Here's a detailed breakdown of some key headings within Chapter 76:

7601 - Unwrought Aluminium

This heading covers aluminium in its basic, unprocessed form, intended for further manufacturing. This typically includes:

• 760110 - Aluminium, not alloyed
• 760120 - Aluminium alloys

The GST rate applicable to unwrought aluminium (both alloyed and non-alloyed) is currently 18%.

7602 - Aluminium Waste and Scrap

This heading pertains to discarded or residual aluminium suitable for recycling and reuse. This covers:

• 76020010 - Aluminium scrap
• 76020090 - Aluminium waste

Aluminium waste and scrap also attract a GST rate of 18%.

7604 - Aluminium Bars, Rods and Profiles

This category encompasses various extruded or drawn forms of aluminium. Examples include:

• 760410 - Of aluminium, not alloyed
• 760421 - Of aluminium alloys
• 760429 - Other

The GST rate on aluminium bars, rods, and profiles typically stands at 18%.

7606 - Aluminium Plates, Sheets and Strip, of a Thickness Exceeding 0.2 mm

This heading covers flat rolled products exceeding 0.2mm in thickness:

• 760611 - Of aluminium, not alloyed
• 760612 - Of aluminium alloys
• 760691 - Other
• 760692 - Other

The GST rate for these items is generally 18%.

7607 - Aluminium Foil (Whether or Not Printed or Backed With Paper, Paperboard, Plastics or Similar Backing Materials) of a Thickness (Excluding Any Backing) Not Exceeding 0.2 mm

This heading specifies aluminium foil with a thickness of not more than 0.2mm, with or without backing materials:

• 760711 - Not backed
• 760719 - Other
• 760720 - Backed

Aluminium foil usually falls under the 18% GST bracket.

7608 - Aluminium Tubes and Pipes

This covers hollow aluminium sections used for various applications, including:

• 760810 - Of aluminium, not alloyed
• 760820 - Of aluminium alloys

Similarly, aluminium tubes and pipes are subjected to an 18% GST rate.

7609 - Aluminium Tube or Pipe Fittings (For Example, Couplings, Elbows, Sleeves)

This heading includes fittings used to connect aluminium tubes or pipes:

• 760900 - Aluminium tube or pipe fittings

Aluminium tube or pipe fittings are also taxed at 18%.

7610 - Aluminium Structures (Excluding Prefabricated Buildings of Heading 9406) and Parts of Structures (For Example, Bridges and Bridge-Sections, Towers, Lattice Masts, Roofs, Roofing Frameworks, Doors, Windows and Their Frames and Thresholds for Doors, Balustrades, Pillars and Columns); Aluminium Plates, Rods, Profiles, Tubes and the Like, Prepared for Use in Structures

This heading includes aluminium structures and parts, along with prepared components used in construction:

• 761010 - Doors, windows and their frames and thresholds for doors
• 761090 - Other

The GST rate on aluminium structures typically stands at 18%.

7612 - Aluminium Casks, Drums, Cans, Boxes and Similar Containers (Including Rigid or Collapsible Tubular Containers) for Any Material (Other Than Compressed or Liquefied Gas), of a Capacity Not Exceeding 300 Litres, Whether or Not Lined or Heat-Insulated, But Not Fitted With Mechanical or Thermal Equipment

This includes aluminium containers with a capacity of up to 300 litres, excluding those for compressed or liquefied gas:

• 761210 - Collapsible tubular containers
• 761290 - Other

The GST rate is generally 18%.

7616 - Other Articles of Aluminium

This is a residual category covering various articles not specifically classified elsewhere in Chapter 76. Examples include:

• 761610 - Nails, tacks, staples (other than those of heading 8305), screws, bolts, nuts, screw hooks, rivets, cotters, cotter-pins, washers and similar articles
• 761691 - Cloth, grill, netting and fencing, of aluminium wire
• 761699 - Other

Most articles in this category attract an 18% GST rate.

Impact of GST on the Aluminium Industry

The implementation of GST has significantly impacted the aluminium industry in India. While GST aimed to simplify the tax structure and reduce cascading effects, its impact has been multifaceted. Pre-GST, the industry faced a complex web of central and state taxes, including excise duty, VAT, and octroi. The introduction of GST has streamlined the process to some extent, but the 18% rate can represent a substantial input cost, impacting profitability, particularly for smaller enterprises.

Industry experts, like Mr. R.K. Gupta, a leading tax consultant at Deloitte, have observed that the GST rate on aluminium affects the competitiveness of Indian manufacturers compared to international players. The aluminium industry body, the Aluminium Association of India (AAI), has been advocating for a reduction in the GST rate to 12% to boost domestic consumption and support the growth of the sector. A study conducted by CRISIL in 2023 showed that a lower GST rate could potentially increase demand by 10-15%.

How to Determine the Correct HSN Code and GST Rate

Accurately determining the HSN code is critical for correct GST compliance. Follow these steps:

1. Product Description: Provide a detailed description of the aluminium product, including its composition, form (e.g., ingot, sheet, tube), dimensions, and intended use.
2. HSN Tariff: Refer to the official HSN tariff published by the CBIC. The HSN can be accessed on the CBIC website (cbic.gov.in).
3. Interpretative Rules: The HSN system follows certain interpretative rules to classify products. Understanding these rules is essential for accurate classification.
4. Expert Consultation: If uncertain, consult with a customs broker, tax advisor, or industry expert specializing in HSN classification.
5. GST Rate Notification: Once the HSN code is determined, refer to the latest GST rate notifications issued by the government to find the applicable GST rate. These notifications are available on the GST portal (gst.gov.in).

Actionable Insights and Examples

• Example 1: Aluminium Ingots: A company manufactures aluminium ingots (unwrought aluminium) for casting purposes. The correct HSN code is 760110 (Aluminium, not alloyed), and the applicable GST rate is 18%.
• Example 2: Aluminium Foil for Packaging: A packaging company uses aluminium foil (thickness less than 0.2 mm) for food packaging. The HSN code is 760711 (Not backed), and the applicable GST rate is 18%.
• Example 3: Aluminium Window Frames: A construction company uses aluminium window frames in building projects. The HSN code is 761010 (Doors, windows and their frames and thresholds for doors) and the applicable GST rate is 18%.

Actionable Insight 1: Regularly monitor changes in GST rates and HSN classifications by subscribing to official updates from the CBIC and GSTN.

Actionable Insight 2: Maintain accurate records of all aluminium purchases and sales, including HSN codes and GST rates, for audit purposes.

Actionable Insight 3: If manufacturing aluminium products, ensure clear documentation of the manufacturing process to justify the HSN classification and GST rate applied.

Actionable Insight 4: Consider input tax credit (ITC) possibilities on aluminium purchases to offset GST liability. Ensure that the necessary documentation is in place for claiming ITC.

Actionable Insight 5: Explore the benefits of the GST composition scheme if eligible. This scheme simplifies GST compliance for small businesses with turnover below a certain threshold.

Impact of Recent GST Amendments

The GST regime is subject to periodic amendments and clarifications. Stay updated on any recent changes announced by the GST Council regarding Chapter 76. Changes may include revised GST rates for specific aluminium products, amendments to HSN classifications, or clarifications on eligibility for input tax credit. Some older rulings also remain important; for example, circulars on job work related to aluminium extrusion.

For instance, a notification issued in October 2023 provided clarification on the GST rate applicable to certain aluminium composite panels (ACPs). Always check recent announcements for changes like this.

Refer to Carbon Electrodes GST Rates & HSN Code 8545 | Expert Guide for more information on related product categories and their GST implications. While not directly related, it demonstrates the importance of correctly identifying the HSN code and GST rates for various manufacturing inputs.

Conclusion

Navigating the GST landscape for aluminium requires a thorough understanding of Chapter 76, its associated HSN codes, and the applicable GST rates. This guide provides a comprehensive overview to help businesses make informed decisions and ensure compliance. By staying updated on the latest regulations and seeking expert advice when needed, businesses can effectively manage the GST implications on aluminium and optimize their operations. Continuous monitoring of notifications and clarifications from CBIC and GSTN is crucial for navigating this dynamic tax environment.