Understanding GST & Taxation for Metal Exporters in India
India is a major global exporter of metals like brass, aluminium, copper, and zinc, with strong manufacturing bases in states like Gujarat, Maharashtra, Tamil Nadu, and Rajasthan. Whether you're exporting brass fittings from Jamnagar or recycled aluminium ingots from a recycling company in India, understanding GST and taxation rules is crucial for smooth operations and cash flow.
If you're into the metal export business, this guide will simplify all the GST and tax-related matters that you must know to run a compliant and profitable venture.
1. What Counts as Metal Export in India?
Before we jump into GST, let's understand how the government views metal exports:
Physical Exports – You send brass parts, ingots, or other items outside India through shipping or air freight.
Deemed Exports – Goods sold to SEZs or EOUs in India but treated as exports under law.
Merchant Exports – You buy metal goods locally and export them under your firm’s name.
Whether you're a manufacturer-exporter or a recycling company in India exporting metal scrap or ingots, you are subject to the same tax treatment under GST law.
2. GST Applicability on Metal Exports
The good news? Exports are zero-rated under GST. This means you don’t have to charge GST on your export invoice. But you do get the benefit of claiming a GST refund in two ways:
a) Export with Payment of IGST
You pay IGST on your invoice.
Later, claim it as a refund via GSTR-3B and GSTR-1 filings.
b) Export without Payment of IGST (Under LUT)
You file an LUT (Letter of Undertaking) with the GST portal.
You don’t pay any GST on export invoices and still claim input tax credit (ITC) refunds.
💡 Tip: Most exporters prefer the LUT route because it avoids upfront GST payments and eases working capital pressure.
3. GST Rates on Common Metal Products
Here’s a quick view of applicable GST rates on some metal products commonly exported from India:
Even if you're a top recycling company in India, selling to overseas clients still counts as zero-rated supply under GST.
4. Claiming GST Refund for Exporters
To claim a GST refund successfully, you’ll need to:
File GSTR-1 (monthly/quarterly invoice-wise returns)
File GSTR-3B with export values
Submit shipping bill, FIRC (foreign inward remittance certificate), and invoice copies
If you're exporting without payment of IGST under LUT, then you can claim ITC refund on inputs like:
Copper rods, aluminium blocks, chemicals used in smelting
Packaging materials
Transport and logistics costs (if paid with GST)
📊 According to CBIC, over ₹1.35 lakh crore worth of GST refunds were processed for exporters in FY 2022–23 alone.
5. Input Tax Credit (ITC) for Metal Exporters
One of the best benefits under GST is the Input Tax Credit system. This allows you to claim back the GST you paid on:
Raw materials (like copper, zinc, brass scrap)
Electricity (for industrial use)
Capital goods (furnaces, extrusion machines)
Logistic services like freight or warehousing
If you're a recycling company in India, GST on your scrap procurement, processing inputs, or machinery can all be claimed as ITC and later refunded if you’re exporting the final product.
6. Customs Duties and Drawbacks
While GST applies to domestic supply, customs duty is what you deal with at the port. Here's what you need to know:
Basic Customs Duty (BCD) may apply on imported inputs.
Exporters can claim duty drawback (a fixed refund on customs duties) under RoDTEP.
Metal exporters can also benefit from EPCG scheme—which provides duty-free import of machinery used for manufacturing export goods.
7. TDS, TCS & Income Tax for Exporters
Apart from GST, here are other tax points to keep in mind:
If you pay over ₹50 lakh to a domestic seller, TCS under Section 206C(1H) may apply.
You may also be required to deduct TDS on services like transport or labor contracts.
As an exporter, ensure you pay advance income tax if your profits exceed basic exemption.
Also, for companies dealing in bulk metal export or high-value consignments, it’s wise to maintain books of accounts that reconcile GST, customs, and IT filings properly.
8. Banking & Foreign Exchange Compliance
GST law expects exporters to receive foreign currency payments within 9 months from the invoice date.
Documents required:
FIRC (Foreign Inward Remittance Certificate)
BRC (Bank Realization Certificate)
Shipping bill details
RBI and your AD bank (Authorized Dealer) monitor export payments to prevent GST fraud or misuse.
9. Government Schemes Supporting Metal Exporters
The Indian government has rolled out several benefits for exporters:
RoDTEP (Remission of Duties and Taxes on Exported Products) – Refunds embedded taxes not refunded via GST.
Duty Drawback – Rebate of customs duties for eligible exporters.
MSME Udyam Registration – Makes you eligible for cheaper loans, easier credit, and export promotion schemes.
If you’re a small brass part manufacturer or a recycling company in India, registering under MSME can open many doors.
10. Common Mistakes to Avoid in GST for Exporters
Here are a few red flags that can delay your refunds or attract penalties:
Not renewing your LUT annually
Mismatch in invoice values between GSTR-1 and shipping bill
Delay in filing returns or submitting FIRC
Using incorrect HSN codes
✅ Pro Tip: Always consult a GST expert or export consultant if you’re new to the system—especially if you're part of the top recycling companies in India handling large orders.
Conclusion
GST has made India's taxation system more transparent and efficient—but it comes with its own procedures, especially for exporters. Whether you're a traditional brass part exporter or a recycling company in India selling aluminium ingots abroad, staying compliant with GST and income tax rules ensures faster refunds, no penalties, and better credibility with global clients.
Understanding taxation is not just about following rules—it’s about saving money, improving cash flow, and scaling your export business responsibly.
So keep your documents ready, file on time, and make India proud in the global metal market!
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