GST Rate List on Construction and Building Materials

In 2017, the Government of India made provisions to subsume all the indirect taxes in the form of Goods and Services Tax (GST). Under the same GST regime, construction industry was added and raw materials and processes in the same were now being taxed as per construction gst rate. Albeit simplifying the tax system, it still left real estate developers and builders strangled between hefty rates of Gst on the construction sector. Given that real estate employs almost 30 million people in India, GST on building supplies is required. A ‘Works Contract’ was started to regulate construction-related activity. A Work Contract is simply an agreement related to construction of a building on a piece of land. Furthermore, it implies the raw materials and construction products utilised to construct the building. 

So, to bring ease at your doorstep, this article pertains to details about the related rates of gst on construction and building materials. Keep scrolling to know more about it in depth.

GST on Construction and Building Materials

When purchasing building and construction materials in India, builders must pay the four-tiered GST tax. Construction and building supplies have a prevalent GST rate that ranges from 5% to 28%.

GST on Sand

The Gst on sand (non-coloured or coloured excluding sand with metallic content) is taxed at a rate of 5%.

But other sand materials like bitumen and asphalt, oil shade or bituminous & tar sands, asphaltic rocks and natural asphaltites get a 18% GST.

GST on Cement

Slag, super sulphate, alumina, and Portland cement of all varieties—whether coloured or clinkered gains a standard GST charge of 28%. Mortars, concrete and refractory cement will, however, be put up to an 18% tax, but cement-bonded particle board would be subject to the 12% rate of GST. 

GST on Brick

The cost of building bricks, fly ash, siliceous, or other fossil-made bricks is available at a GST rate of 5%. But, from April 2022, the rate has been revised and has been confirmed as 12% from a mere 5% in the past.

GST on Marble

Blocks made of granite and marble are taxed at a 12% rate of GST. Granite and marble products other than blocks, however, are subject to a 28% rate of GST.

GST Rate on Building Stone

A 5% rate of GST is marked upon numerous building stones like porphyry, basalt and sandstone etc.

GST Rate on Steel and Iron

An exclusive 18% rate of GST is put up on construction products made up of iron and steel like wires, rolls, rods etc.

GST on Tiles

A 5% rate of GST is placed on roofing or earthen tiles, 18% on bamboo flooring tiles and 28 % on all other tiles like cement tiles, tile of artificial stone, concrete tile, sawdust, particles, plastic-made ceiling coverings, blocks of ceramic flooring, sheets, tiles, panels, cubes of ceramic mosaic, chips, panels, boards, wall tiles etc.

GST on Coal

A 5% rate of GST is placed on coal in construction materials.

GST on Mica

A 12% GST rate is placed on articles of mica, along with worked mica.

GST Rate on Electrical Machinery

A 28% GST rate is put up on electrical machinery and similar appliances.

GST Rate on Paint and Varnish

A 28% rate of GST has been put up on items related to paint and varnish, like enamels, paints, varnishes, lacquers, synthetic and natural polymers, caulking compounds, grafting putty, glaziers’ putty, resin cement, and indoor walls, ceilings, and floors.

GST Rate on Bathroom Fittings

An 18% rate of GST has been taxed on pipe or tube fittings such as aluminium, nickel, plastic, couplings, copper elbows and sleeves, steel, and iron. The 28% rate of GST is placed on wash basins, ceramic sinks, bidets, baths, pedestals for wash basin, water closet pans, sanitary fixtures, conduits, ceramic pipes, gutterings and flushing cisterns.

GST Rate on Wallpapers

A 28% rate of GST has been placed on all types of wall coverings and wallpapers.

HSN Codes for Building Materials

Different HSN codes depicting construction materials are compiled in a table below:-

Impact of GST on Construction Sector

In India, the construction sector occupies second place after the agriculture sector, i.e., approximately 11% of India’s GDP. Accumulating GST within the construction industry only has a positive overall effect. Construction project costs are anticipated to decrease as a result of the GST. This will result from the elimination of the cascading tax effect and a decrease in the total tax burden on the building sector. Given that the taxes on inputs are now included in the GST, it is also anticipated that the GST will lower the cost of inputs. As a result of lower raw material costs, construction projects will be less expensive overall. It has also decreased the price of construction materials, lowered the burden of tax compliance, and given the industry a more effective tax system. Furthermore, the GST has helped to create a more transparent pricing structure for construction materials, making it easier for customers to compare prices and make informed decisions.

Frequently Asked Questions (FAQs)