Is Scrap Metal GST-Exempt in Singapore?

TL;DR — Scrap metal in Singapore is not GST-exempt as a class. It is a standard-rated supply (9% GST from 2024 onwards) when sold domestically by a GST-registered supplier. However, scrap exported out of Singapore is typically zero-rated, and certain B2B sales to GST-registered buyers can be treated under the Major Exporter Scheme or customer accounting rules. This guide walks through what IRAS (Inland Revenue Authority of Singapore) actually says, common misconceptions, and what shows up on a compliant invoice. This is general information, not tax advice — consult a qualified tax adviser for your specific situation.

The Core Rule: Scrap Is Standard-Rated, Not Exempt

The Inland Revenue Authority of Singapore (IRAS) administers Goods and Services Tax (GST) under the GST Act. Under the Act, there are four categories of supply:

• Standard-rated — GST charged at the prevailing rate (9% as of 1 Jan 2024).
• Zero-rated — GST charged at 0% (mainly exports and international services).
• Exempt — no GST; specific list including most financial services and sale/lease of residential property.
• Out-of-scope — transactions outside Singapore’s GST system entirely.

Scrap metal doesn’t appear in the exempt list. A sale of scrap metal by a GST-registered business to another Singapore-based party is a standard-rated supply — 9% GST applies unless specific zero-rating or customer accounting rules are engaged.

This surprises some sellers and corporate procurement teams because scrap “feels” like waste rather than a normal good. From a tax perspective, it’s simply tangible goods being supplied for consideration.

When GST Registration Is Required

Only GST-registered businesses charge GST. Singapore requires GST registration if a business’s taxable turnover exceeds S$1 million in a 12-month period (retrospective or prospective). Voluntary registration is also possible below that threshold.

Practical consequences for scrap transactions:

• A GST-registered dealer selling scrap domestically to another Singapore business charges 9% GST on the invoice.
• A non-registered seller (e.g., a small contractor, an individual, a sole proprietor below the threshold) does not charge GST.
• A GST-registered business buying scrap from a non-registered seller pays no GST on that purchase — which also means no input tax to claim.

If you’re a business generating scrap regularly, check with your accountant whether the income pushes you into the GST threshold — it’s not uncommon for shipyards, fabricators, and demolition contractors to cross it.

Export Sales: Zero-Rating

A large share of Singapore scrap is exported to smelters in Malaysia, Thailand, Vietnam, India, and elsewhere — see how smelters process scrap for the regional flow. These export sales are typically zero-rated under IRAS rules for the export of goods.

Zero-rating requires the exporter to maintain documentary evidence: export permit from Singapore Customs, bill of lading or airway bill, invoice, and proof of payment. Without compliant documentation, IRAS can re-characterise the supply as standard-rated and the exporter becomes liable for output tax.

Customer Accounting for Prescribed Goods

IRAS introduced a customer accounting mechanism effective 1 January 2019 for local supplies of prescribed goods — notably mobile phones, memory cards, off-the-shelf software, and certain other listed items — valued above S$10,000 per transaction. Under customer accounting, the supplier doesn’t charge GST; instead, the GST-registered customer accounts for both output and input GST.

As of publication, scrap metal is not on IRAS’s standard “prescribed goods” list for customer accounting, so in normal scrap transactions the dealer charges GST in the ordinary way. (Some B2B transactions may qualify under other IRAS schemes like the Major Exporter Scheme; this is where professional tax advice is important.)

What Should Appear on a Compliant Scrap Invoice

A GST-compliant tax invoice from a Singapore scrap dealer should show:

• The words “Tax Invoice”
• Supplier’s name, address, and GST registration number
• Invoice number and date
• Customer’s name and address
• Description of goods — itemised by grade and weight (e.g., “Copper Cu #1: 120 kg”, “HMS 1 & 2: 1,850 kg”)
• Quantity and unit price
• Total before GST
• GST amount (at prevailing rate)
• Total amount payable inclusive of GST

For sellers to a dealer (i.e., the dealer is buying scrap from you), the dealer will issue a self-billed tax invoice or a buy-note with equivalent details if they are GST-registered and appropriately authorised under IRAS’s self-billing rules. Whether GST features depends on whether you are GST-registered.

Common Misconceptions

• “Scrap is waste, so it’s GST-free.” No. Disposal value makes it a supply of goods. Domestic scrap sales by GST-registered parties are standard-rated.
• “I’m a one-time seller, I need to charge GST.” No — only GST-registered businesses charge GST.
• “The dealer shouldn’t be charging me GST on top of the scrap value.” If the dealer is GST-registered and you’re a Singapore buyer, they are required to. You can usually recover it as input tax if you’re GST-registered.
• “Exports should show GST on the invoice.” Exports are zero-rated — GST on the invoice is 0%, not absent. The difference matters for IRAS reporting.

Practical Implications for Buyers and Sellers

If you’re a GST-registered business selling scrap: charge GST on domestic sales, zero-rate exports with proper documentation, and report these in your GST return as normal.

If you’re buying scrap from a GST-registered dealer: the invoice will show GST; if you’re GST-registered, claim the input tax; if not, it’s a net cost.

If you’re selling as a non-registered individual or small business: no GST on your transactions. The dealer may still issue a buy-note documenting the purchase for their own records and NEA/SPF compliance obligations.

See current Singapore scrap prices and our general scrap FAQ for more operational guidance.

Disclaimer

This article is general information about how GST typically applies to scrap metal transactions in Singapore. It is not tax advice. GST treatment can depend on specific facts — your registration status, counterparty location, delivery terms, and documentation. For your situation, consult a qualified tax adviser or refer to current IRAS e-Tax Guides at iras.gov.sg.

Related Reading

• Scrap Metal Prices in Singapore
• How to Sell Scrap Metal in Singapore
• Scrap Metal FAQ
• Our Recycling Service

Scrap is a supply of goods like any other — GST applies at 9% domestically unless zero-rated on export. It is not exempt.

Molten Steel Pte Ltd — NEA-licensed scrap metal dealer, Singapore