GST on Construction Materials 2026
Quick Rate Guide: Cement 28%, Steel TMT 18%, Bricks 12%, Tiles 18%, Sand 5%, Paint 28%, PVC pipes 18%, Plywood 18%. ITC blocked for residential construction but available for commercial buildings. Composite supply (material + labour) is 12% works contract, not itemized rates.
For builders, contractors, and individual home builders, GST on construction materials is a major budget item. GST adds 5-28% to material costs depending on type. Knowing the exact rates for cement, steel, bricks, sand, tiles, and paint helps you budget accurately for FY 2026-27 projects.
This guide provides rate-by-material reference, HSN codes, ITC eligibility, and RMC (Ready Mix Concrete) rules for contractors.
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GST Rates Table: Major Construction Materials
Cement & Concrete
| Item | HSN | GST Rate | Notes |
|---|---|---|---|
| Cement (Portland, aluminous, slag) | 2523 | 28% | Highest GST on construction materials |
| RMC (Ready Mix Concrete) | 3824 50 10 | 18% | Often negotiated; may be subject to differential GST |
| Fly ash bricks | 6815 | 12% | Lower than cement due to waste material |
Steel & Metal
| Item | HSN | GST Rate |
|---|---|---|
| TMT bars / Reinforcement bars | 7213/7214 | 18% |
| Stainless steel | 7220 | 18% |
| Steel structures/fabricated | 7308 | 18% |
Bricks & Masonry
| Item | HSN | GST Rate | Historical Note |
|---|---|---|---|
| Red clay bricks | 6901 | 12% | Reduced from 5% in 2022 (major impact on affordable housing) |
| AAC blocks | 6810 | 12% | Autoclaved aerated concrete |
Sand & Aggregate
| Item | HSN | GST Rate |
|---|---|---|
| Natural sand (construction grade) | 2505 | 5% |
| Manufactured sand (M-sand) | 2505 | 5% |
Tiles & Flooring
| Item | HSN | GST Rate |
|---|---|---|
| Ceramic tiles | 6907 | 18% |
| Vitrified tiles | 6907 | 18% |
| Marble slabs (>2.4m length) | 2515/2516 | 28% |
| Marble tiles | 6810-6815 | 18% |
| Mosaic tiles | 6810-6815 | 18% |
Paint & Coatings
| Item | HSN | GST Rate |
|---|---|---|
| Architectural paint | 3208/3209 | 28% |
| Putty / wall filler | 3209 | 28% |
| Primer | 3208 | 28% |
Plumbing & Sanitary
| Item | HSN | GST Rate |
|---|---|---|
| PVC pipes | 3917 | 18% |
| CPVC pipes | 3917 | 18% |
| Sanitary ware (basins, toilets) | 6910 | 18% |
| Faucets / taps | 7307 | 18% |
| Water tanks (plastic) | 3917 | 18% |
Electrical & Glass
| Item | HSN | GST Rate |
|---|---|---|
| Wires & cables | 8544 | 18% |
| Electrical switchgear/MCB | 8536 | 18% |
| LED lights | 8539 | 12% |
| Float glass / window glass | 7005 | 18% |
Aluminium & Wood
| Item | HSN | GST Rate |
|---|---|---|
| Aluminium doors/windows | 7610 | 18% |
| Plywood | 4412 | 18% |
| Particle board / MDF | 4410 | 18% |
ITC (Input Tax Credit) Rules for Construction
Critical rule: ITC on construction materials used for residential property construction is BLOCKED.
ITC BLOCKED (No credit available):
- Residential flat/house construction (own use)
- Apartment society construction
- Any construction for personal residential use
ITC AVAILABLE (Credit available):
- Factory construction (business use)
- Office building (business use)
- Commercial complex (lease/rent for business)
- Hotel/hospitality construction
- Industrial sheds
- Builder/contractor building under-construction properties for sale
- Repairs and renovation of commercial property
Key distinction: If you are a builder selling flats, ITC is available on input materials (cement, steel, bricks) because output is taxable supply (sale of flats at 12% or 5%). After OC (Occupation Certificate), supply becomes exempt (no ITC on inputs).
Composite Supply (Material + Labour)
When a contractor provides both materials AND labour, it is a works contract service at 12% GST (or 18% for complex projects), NOT itemized material rates.
Example:
- Contractor quotes: Rs 10 lakh for labour + materials to build a house
- Input GST breakdown: Cement (28%) + Steel (18%) + Bricks (12%) + Labour (18%)
- Output GST: Charged at 12% works contract rate, not composite of inputs
- ITC: If residential, ITC is BLOCKED on all inputs
Important: Buyer cannot separate material from labour and claim different rates. It is a single composite service taxed at works contract rate.
HSN Code Reference (Top 15)
Keep these HSN codes handy for GST return filing:
- Cement (Portland, aluminous): 2523 (28% GST)
- Sand & gravel: 2505 (5% GST)
- Marble slabs: 2515/2516 (28% GST)
- Clay bricks: 6901 (12% GST)
- Ceramic tiles: 6907 (18% GST)
- AAC blocks: 6810 (12% GST)
- Sanitary ware: 6910 (18% GST)
- Float glass: 7005 (18% GST)
- Steel bars/rods: 7213/7214 (18% GST)
- Structural steel: 7308 (18% GST)
- Aluminium doors/windows: 7610 (18% GST)
- Electrical cables: 8544 (18% GST)
- Plywood: 4412 (18% GST)
- PVC pipes: 3917 (18% GST)
- Paint: 3208/3209 (28% GST)
Impact on Home Construction Cost
Scenario: Building 1,000 sqft house
Estimated material cost breakdown (before GST):
- Cement: Rs 1 lakh → GST Rs 28,000
- Steel: Rs 2 lakh → GST Rs 36,000
- Bricks: Rs 50,000 → GST Rs 6,000
- Tiles: Rs 1.5 lakh → GST Rs 27,000
- Paint: Rs 50,000 → GST Rs 14,000
- Plumbing/electrical: Rs 75,000 → GST Rs 13,500
- Total material cost: Rs 5.75 lakh
- Total GST (if ITC available): Rs 1,24,500
- Total with GST: Rs 6,99,500
But: ITC is BLOCKED for residential. Builder/contractor absorbs GST cost. Final price to homeowner includes GST as non-deductible cost.
Common GST Issues for Contractors
Issue 1: Claiming ITC on residential construction
Mistake: Contractor claims ITC on cement, steel, bricks for residential house construction. Reality: ITC blocked for residential; can only claim on commercial/business properties.
Issue 2: Not separating material and labour in invoice
Mistake: Single invoice shows "labour + material" without itemization. Reality: AO may disallow ITC on labour portion (labour is typically 18%, material varies). Itemize invoice to preserve ITC on materials.
Issue 3: Buying from non-GST suppliers
Mistake: Contractor purchases materials from informal/non-registered vendors to save cost. Reality: Cannot claim ITC on purchases without valid tax invoice. Contractor bears full GST cost.
Key Takeaways for Builders & Contractors
- Cement is most expensive: 28% GST is the highest rate; consider alternative materials if available.
- ITC blocked for residential: Plan for GST as non-recoverable cost on home construction.
- ITC available for commercial: Commercial property construction gets full ITC; cost savings justify registration.
- Works contract at 12%: Material + labour composite is 12% GST, not sum of itemized rates.
- HSN codes matter: Use correct HSN on invoices to support ITC claims and avoid notices.
- RMC GST is complex: Ready mix concrete may be subject to different GST slab depending on composition; negotiate carefully.
Frequently Asked Questions
I am building a residential house. Do I pay 28% GST on cement or can I claim ITC to reduce it?
You pay full 28% GST on cement. ITC is blocked for residential construction—you cannot credit this GST. Plan this as a project cost, not tax-deductible.
Contractor quoted Rs 50 lakh for material + labour. What is the GST rate?
If it is a single composite supply (material + labour bundle), GST is 12% as a works contract service, i.e., Rs 6 lakh GST. The contractor cannot itemize material (18%) and labour (18%) separately once quoted as composite.
I bought steel from a non-registered vendor (no GST invoice). Can I claim ITC?
No. ITC requires a valid tax invoice from a GST-registered supplier. Purchase without invoice = no ITC available. Always buy from registered vendors.
I am a builder selling under-construction flats. Is ITC available on cement/steel I purchased?
Yes. ITC is available on inputs for under-construction property sales (taxable supply at 12% or 5%). After OC, flats become exempt supply; no further ITC.
Sand is 5% GST. Cement is 28%. Can I blend them to reduce GST?
No. Each material has its own GST rate based on HSN code. You cannot average rates or claim lower rate for higher-GST material. File GSTR-1 with individual rates per HSN.
GST Rate Schedule (Notification Nos 1/2017-CT and amendments); HSN code classifications (Ministry of Commerce); CBDT Rule 17(5) on ITC blocking for residential property; Composite supply norms for works contracts (Department of Revenue).
