GST Rate for Construction and Building Materials

GST is set to roll out from 1st July 2017 in India, completely overhauling the indirect tax regime. The proposed GST is set to improve ease of doing business in India and reducing the tax burden by eliminating or integrating many of the tax codes. In this article, we look at the GST rate for building materials like cement, bricks, tiles, iron, steel and other materials used in construction.

The Goods and Services Tax (GST) rate of 12 percent will be applicable on under-construction properties. This rate with input tax credit seeks to remove the inefficiencies of dual taxation in the form of value-added taxation (VAT), service tax and puts an end to multiple taxes.

• Natural sands of all kinds, whether or not colored, other than metal-bearing sands is classified under Chapter 26 of the HSN Code. GST rate for sand is fixed at 5%. Further, bitumen and asphalt, natural; bituminous or oil shale and tar sands; asphaltites and asphaltic rocks attract a GST rate of 18%.
• Pebbles, gravel and crushed stone used in concrete is 5%. The following are HSN Code classification for gravel and crushed stone for which 5% GST rate is applicable:
• Pebbles, gravel, broken or crushed stone, of a kind commonly used for concrete aggregates, for road metalling or for railway or other ballast, shingle and flint, whether or not heat-treated; macadam of slag, dross or similar industrial waste, whether or not incorporating the materials cited in the first part of the heading; tarred macadam; granules cheeping and powder of stones.
• Limestone flux; limestone and other calcareous stone, of a kind used for the manufacture of lime or cement.
• Marble and granite blocks attract a GST rate of 12%. On the other hand, marble, granite and travertine, in other than blocks attract a GST rate of 28%.
• All types of portland cement, aluminous cement, slag cement, super sulfate cement and similar hydraulic cement, whether or not colored or in the form of clinkers would attract 28% GST. Cement is classified under chapter 25 of the HSN Code.
• All iron and steel products are classified under chapter 72 of the HSN code and attract a uniform GST rate of 18%. Hence, iron blocks, wire, rolls, rods, etc used in construction attract 18% GST.

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