Understanding GST Rates on Construction Materials in India

The Goods and Services Tax (GST) introduced a simplified tax regime for India. However, for those in the construction industry, navigating the various GST rates for raw materials can be complex. This blog aims to untangle the web and provide a clear understanding of GST rates applicable to different construction materials in 2024.

Understanding GST Rates on Construction Materials

Construction materials are categorized under different GST slabs, attracting rates ranging from 5% to 28%. Here's a breakdown of the GST rates for commonly used materials:

• 5% GST:
  • Sand (except metal-bearing sand)
  • Pebbles, gravel, and crushed stones
  • Building stones (basalt, sandstone, etc.)
  • Fly ash bricks
  • Building bricks and fossil meal bricks
  • Earthen or roofing tiles
• 12% GST:
  • Marble and granite blocks
  • Cement bonded particle boards
  • Refractory cement, mortars, and concrete
• 18% GST:
  • Iron and steel products
  • Pipe fittings
  • Copper wire (insulated)
  • Paints and varnishes
  • PVC pipes
  • Locks
• 28% GST:
  • Bitumen, asphalt, and similar materials
  • Prefab components
  • Glass and ceramic-based tiles (except earthen and roofing tiles)
  • Artificial stone, cement, and concrete tiles
  • Bamboo flooring tiles
  • Wallcoverings and wallpapers
  • Sanitary ware (except pipe fittings)
  • Most wooden materials (including plywood used in furniture)
  • Base metal mountings and fittings for furniture

GST Rates for Specific Products

• Cement: All types of cement (super sulphate, slag, aluminous, and Portland) attract a standard GST of 28%.
• Sand: Natural sand of all kinds (colored or non-colored) falls under the 5% GST slab. However, bituminous or oil shale and related materials attract a higher rate of 18%.
• Bricks: GST rates for bricks vary. Building and fossil meal bricks come under the 5% bracket, while multicellular foam glass blocks are taxed at 28%. Fly ash bricks also benefit from the lower 5% GST rate.

Impact of GST on Real Estate Projects

The GST regime has varying implications for different types of real estate projects:

• Affordable Housing (up to ₹45 lakh): 1% GST without Input Tax Credit (ITC) benefit.
• Non-Affordable Housing: 5% GST without ITC benefit.
• Commercial Properties: 12% GST with ITC benefit.

Conclusion

The GST system, while simplifying the tax structure to some extent, presents complexities for those dealing with various construction materials. This guide provides a snapshot of the current GST rates applicable in 2024. However, staying updated on any revisions or changes is crucial for navigating the construction industry effectively.