I want to overlay structural drawings at a scale of 1:200 over the site plan which is at a scale of 1:500.
How can I do this and is photoshop the best software to use? I have the drawings saved in pdf format.
I don't know that PS is the "best software to use", but what you want could easily be done by stacking the PDFs as layers. Either open them separately and then use copy&paste or use File --> Place to import them as smart objects. Then transform them using the free transform tool to line things up...