Steel & Metal Trading

Legally, section 16(2)(aa) makes appearance in GSTR-2B a condition, so the credit is not available until he files. Commercially, your leverage is the unpaid tax component of his invoice — the practice we set up is to release the taxable value on schedule and the GST component only once the invoice reflects in 2B. Courts have occasionally granted relief where the buyer proved payment and genuineness and the supplier had absconded, but those are hard-fought exceptions, not a plan.

Since 10 October 2024, purchases of metal scrap under Chapters 72 to 81 from an unregistered person by a registered person are under reverse charge. You raise a self-invoice, pay the tax in cash — it cannot be set off from the credit ledger — and then claim it as input credit in the same or a subsequent period. Missing this is one of the more common findings in scrutiny of metal traders, and interest runs from the original due date.

Where you buy metal scrap from a registered supplier, GST TDS at 2% applies under Notification 25/2024-CT if the value of supply under the contract exceeds ₹2.5 lakh. That requires a separate registration as a deductor, filing GSTR-7 by the 10th of the following month and issuing a TDS certificate to the supplier. Traders who deal in scrap alongside their main line usually discover this only when a supplier asks where his TDS credit has gone.

Extension is only possible in the window from eight hours before expiry to eight hours after. Once that closes you are into section 129 territory, which means tax plus an equal penalty before the vehicle is released. Validity is one day per 200 km from the time Part-B is entered, so entering Part-B at despatch rather than at loading, and monitoring expiry on the road, prevents most of these.

TCS on sale of goods under the old section 206C(1H) was withdrawn with effect from 1 April 2025, so the buyer-versus-seller overlap is gone. What remains is TDS on purchases under section 393(1) Table Sl. 8(ii), formerly 194Q — 0.1% on purchases from a resident seller above ₹50 lakh in aggregate for the year, on the value in excess of ₹50 lakh, excluding separately shown GST, where your preceding-year turnover exceeded ₹10 crore. TCS on scrap under the separate section 206C entry continues.

Failure to deduct under section 393(1) Sl. 8(ii) triggers disallowance of 30% of the purchase value, which for a steel trader is catastrophic relative to profit. The control is a rolling annual tracker per supplier so the ₹50 lakh threshold is caught on the invoice that crosses it, not at year end when the deduction can no longer be made cleanly.

Possibly. Under section 63 of the Income-tax Act 2025, audit is required above ₹1 crore of turnover, or ₹10 crore where cash receipts and cash payments are each within 5%. Many commentators read section 63 as also creating a standalone trigger where an eligible assessee declares profit below the deemed rate under section 58, regardless of prior opting-in. That reading is contested and untested. Above ₹10 crore you are audited on the turnover limb anyway — the real work is stock and gross-profit documentation.

Yes. A three-year outer limit on filing returns is in force from 1 July 2025, operationalised from the October 2025 tax period: once a return period is more than three years past due, the portal will not accept it. For traders carrying old unreconciled periods, that clock has already started, which is why an ITC recovery review on past periods is usually the first thing we run.