Notification 04/2026 Imposes GST Reverse Charge on Plastic, Tyre, E-Waste, and Cooking Oil Scrap

Under Notification No. 04/2026-Central Tax (Rate), the reverse charge mechanism applies to specified waste and scrap materials effective November 1, 2026. The mandate covers used cooking oil, plastic scrap, tyre scrap, and e-waste scrap, shifting tax liability directly to registered recipients. The reverse charge mechanism alters standard tax collection by placing the payment obligation on the buyer rather than the supplier, aiming to curb tax evasion in unorganized scrap sectors.

Previously, these supplies followed forward charge mechanisms where suppliers remitted the tax, whereas the new framework enforces recipient-side compliance. Businesses dealing in scrap must update accounting systems to account for GST under reverse charge for used cooking oil, plastic, tyre, and e-waste materials from November 1, 2026.

Track further clarifications regarding input tax credit claims on these supplies, ensuring accurate monthly return filings to protect cash flow and compliance ratings.