GST RCM now applies to purchases of plastic waste and scrap (HSN 3915) from an unregistered supplier by a registered buyer, effective 1 November 2026. The registered recipient must pay GST under reverse charge, even if the unregistered supplier is below the GST registration threshold.[scconline][pib.gov]
When RCM applies
| Situation | GST treatment |
|---|---|
| Unregistered person sells plastic waste/scrap (HSN 3915) to registered buyer | RCM applies; registered buyer pays GST. [scconline][pib.gov] |
| Registered supplier sells plastic waste/scrap to registered buyer | Normal forward charge; supplier charges GST. Check separate 2% GST TDS requirement. [pib.gov][cfo.economictimes.indiatimes] |
| Unregistered person sells plastic waste/scrap to unregistered buyer | No RCM under this new provision. [corpseed] |
| Plastic scrap classified outside HSN 3915 | This specific RCM entry does not apply; classification must be checked carefully. [taxguru][taxo] |
Practical compliance for buyer
- Verify that the material is genuinely waste and scrap of plastics under HSN 3915, not reusable plastic material, finished goods, or another scrap category.[corpseed][taxo]
- Obtain and retain supplier declaration/evidence that the supplier is unregistered; if the supplier later crosses the threshold, they must obtain GST registration.[pib.gov]
- Pay GST under RCM using the normal RCM time-of-supply and payment rules; report it in the relevant GST return and claim ITC only if otherwise eligible.[corpseed][taxo]
- Issue a self-invoice / payment voucher as applicable for unregistered-supplier RCM supplies and maintain purchase documentation.[corpseed]
- For purchases from a registered plastic-scrap supplier, deduct TDS at 2% and file GSTR-7; issue the TDS certificate to the supplier.[pib.gov][cfo.economictimes.indiatimes]
Important distinction
This is not a general RCM on all plastic purchases. It applies specifically to plastic waste and scrap under HSN 3915, and only in the unregistered seller to registered buyer scenario.[scconline][taxo]
For a packaging or manufacturing business buying plastic scrap from kabadiwalas/unregistered traders, treat every such purchase from 1 November 2026 as an RCM purchase: classify the item, confirm supplier GST status, pay RCM GST, and preserve records for audit.[pib.gov][corpseed]