Explore revised GST rates for brick manufacturers in India, covering the 6% composition scheme, 12% standard rate, and ITC rules.
GST on bricks in India follows a special structure introduced on 1 April 2022. Building bricks, fly-ash bricks and roofing tiles are taxed at 6% without input tax credit, or 12% with input tax credit. The GST registration threshold for brick manufacturers is also lower, at Rs 20 lakh.
Understanding Goods and Services Tax on Bricks in India
The Indian government implemented several changes affecting brick manufacturers, effective April 1, 2022. These revisions primarily concern Goods and Services Tax (GST) rates and registration thresholds for the industry.
Revisions to GST Rates for the Brick Sector
From April 1, 2022, brick kilns have the option to register under a special composition scheme, allowing them to pay GST at a rate of 6% without claiming any input tax credit (ITC). Alternatively, businesses that choose not to participate in this composition scheme are subject to a 12% GST rate and are eligible to claim ITC.
A government notification dated March 31, 2022, confirmed that specific products like building bricks, fly ash bricks and blocks, earthen or roofing tiles, and bricks made from fossil meals are eligible for this composition scheme. Previously, manufacturing and trading bricks incurred a 5% GST rate, with businesses able to claim ITC. The GST Council had already approved introducing a special composition scheme for brick kilns in September of the preceding year.
Recent Update:
On December 21, 2024, the 55th GST Council meeting proposed reducing the GST rate for Autoclaved Aerated Concrete (AAC) blocks with over 50% fly ash content (under HSN code 6815) to 12%. These blocks previously attracted an 18% GST rate. This adjustment aims to boost the market competitiveness of these blocks and encourage the construction sector to adopt more sustainable building materials. AAC blocks incorporating over 50% fly ash are considered environmentally friendly as fly ash is a coal combustion byproduct, and its use in construction helps reduce waste.
GST Rates for Various Brick Types
The Central Board of Indirect Taxes and Customs (CBIC) has specified the following GST rates for different categories of bricks, including fly ash bricks:
| Item Description | HSN Code | GST Rate |
|---|---|---|
| Sand lime bricks, also for stone inlay work | 68 | 12% |
| Fly ash bricks or aggregates or blocks | 6815 | 12% |
| Fossil meals bricks or bricks of similar siliceous earths | 6901 00 10 | 12% |
| Building bricks | 6904 10 00 | 12% |
| Refractory bricks | 6902 | 18% |
| Bricks of pressed or moulded glass | 7016 | 18% |
Revised Registration and Payment Thresholds for GST
All brick manufacturers with an annual turnover surpassing Rs. 20 lakh (or the specified threshold for North-Eastern states) are now mandated to register under the GST framework and remit GST at the newly notified rates. The previous turnover threshold for GST registration was Rs. 40 lakh.
Impact of Recent Notifications on Brick Manufacturers
The table below outlines the key changes introduced by the recent government notifications for brick manufacturers:
| Particulars | Prior Situation | Current Situation |
|---|---|---|
| Turnover threshold for GST registration | GST registration was required only if annual turnover exceeded Rs. 40 lakh. | As per Notification No. 03/2022-Central Tax, the threshold for GST registration has been lowered to Rs. 20 lakh. |
| Composition scheme eligibility | A registered person could opt for the composition scheme if the aggregate annual turnover in the previous year did not exceed Rs. 1.5 crore. | As per Notification No. 04/2022-Central Tax, registered persons cannot opt for the standard composition scheme. However, Notification No. 02/2022-Central Tax allows them to utilize a special composition scheme, paying 6% GST without claiming ITC. |
| GST Rates for non-composition scheme opting individuals | Registered persons engaged in brick manufacturing and trading were charged GST at 5% and could claim input tax credit. | As per Notification No. 02/2022-Integrated Tax (Rate), the GST rate has been increased to 12% with eligibility to claim ITC. |
HSN Code for Building Bricks
The Harmonized System of Nomenclature (HSN) code for building bricks is 6904 10 00.
Frequently Asked Questions (FAQ)
What is the GST rate on bricks?
Since 1 April 2022, bricks are taxed at 6% without input tax credit, or at 12% if the manufacturer opts to claim input tax credit.
Which products are covered by the brick GST rates?
The special rates cover building bricks, fly-ash bricks and blocks, and roofing tiles and similar products.
What is the GST registration threshold for brick makers?
For manufacturers of bricks, the registration threshold is Rs 20 lakh, lower than the general threshold, so more brick makers need to register.
Can brick manufacturers claim input tax credit?
Only if they opt for the 12% rate. Under the 6% special rate, no input tax credit can be claimed on inputs.
