Looking for expert help with GST and income tax for stone crusher and quarry owners India? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.
Key Takeaways
- Crushed stone, gravel and aggregate (HSN 2517), natural sand (2505) and granite blocks (2516) are all 5% GST (Notification 9/2025-Central Tax (Rate), Schedule I, S. Nos. 166, 180-182).
- Sawn granite slabs are 18%, and so is crushing boulders that belong to a customer, because it's a job work service.
- The Rs 40 lakh goods-only registration limit is lost once you earn crushing or hire charges; then it's Rs 20 lakh. Telangana is Rs 20 lakh either way.
- GST on a new jaw or cone crusher is usable credit but never refundable as inverted duty (Rule 89(5) counts inputs only).
- For FY 2025-26, Section 44AD gives 6% / 8% presumptive profit up to Rs 2 crore (Rs 3 crore with cash within 5%); audited cases file ITR by 21 November 2026.
What is the GST rate on stone aggregate and crusher dust? 5%. Heading 2517 covers broken or crushed stone used for concrete aggregates, road metalling or ballast, and granules, chippings and powder of stones of headings 2515 and 2516. It sits in Schedule I (2.5% CGST plus 2.5% SGST) of Notification 9/2025-Central Tax (Rate), S. No. 182, in force from 22 September 2025.
A crusher's tax position looks simple on the price board: every size of aggregate, from 40 mm down to dust, carries 5%. The complications come from everything around it. Your machinery and explosives are billed at 18%. Road contractors often send their own boulders and pay you only to crush. Tippers you hire need TDS. And with turnover in crores, the income tax side moves from a one-page return to audited books quickly. This guide covers GST as it stands today and income tax for FY 2025-26 (AY 2026-27) under the Income-tax Act 1961, with the matching sections of the Income-tax Act 2025 that apply from 1 April 2026.
GST rates on what a crusher or quarry sells
Here's the full list for the products a crusher or a granite quarry normally bills. All of them come from Notification 9/2025-Central Tax (Rate), which replaced Notification 1/2017 from 22 September 2025. None of these entries were changed by the 2026 amendments (01/2026 and 02/2026-Central Tax (Rate)).
Comparison
GST on Crusher and Quarry Products
| Product | HSN | GST | Source (Notif 9/2025-CT(R)) |
|---|---|---|---|
| Crushed stone, gravel, jelly, metal (40, 20, 12, 6 mm), road ballast | 2517 | 5% | Sch I, S. No. 182 |
| Stone chips, granules and dust of stones of headings 2515 / 2516 | 2517 | 5% | Sch I, S. No. 182 |
| Natural sand (river or pit sand) | 2505 | 5% | Sch I, S. No. 166 |
| Granite, crude or roughly trimmed (boulders from the quarry) | 2516 11 00 | 5% | Sch I, S. No. 180 |
| Granite blocks | 2516 | 5% | Sch I, S. No. 181 |
| Basalt, sandstone and other building stone, rough or merely cut into blocks or slabs | 2516 | 5% | Sch I, S. No. 179 |
| Granite other than blocks (sawn slabs) | 2516 12 00 | 18% | Sch II, S. No. 8 |
| Industrial explosives you buy for blasting | 3602 | 18% | Sch II, S. No. 78 |
Source: Notification 9/2025-Central Tax (Rate) dated 17 September 2025, as amended up to 02/2026-Central Tax (Rate)
Manufactured sand (M-sand). The schedule has no separate entry for it. M-sand made by crushing granite or basalt fits the words "granules, chippings and powder, of stones of heading 2515 or 2516" in heading 2517, while heading 2505 is limited to natural sand. That's our reading, and CBIC hasn't issued a clarification. Both headings are 5%, so the rate on your invoice is the same either way. Write "2517" on the bill if your sand is crushed stone.
Where the 18% creeps in. A quarry that cuts its own blocks into slabs moves from 5% to 18% on those slabs. A crusher that only sells aggregate never charges 18%, but it pays 18% on explosives, jaw plates, conveyor belts, screens and the machines themselves. That gap matters for credit, as the next sections show.
Selling your own aggregate vs crushing a customer's boulders
Road and highway contractors often own a quarry lease or buy boulders in bulk, then send them to your plant and pay a per-tonne crushing charge. In that deal you aren't selling stone. You're processing goods that belong to someone else, and that's a service.
Notification 15/2025-Central Tax (Rate) rewrote S. No. 26 of Notification 11/2017 (heading 9988, manufacturing services on inputs owned by others). The 5% job work rate now covers only listed goods: food under Chapters 1 to 22, Chapter 23 products, pharma, hides and leather, printing, textiles, bricks, jewellery, handicrafts and umbrellas. Stone from Chapter 25 isn't there. So crushing charges fall under item (iv), "job work other than (i), (ii) and (iii)", or item (vii), "treatment or process on goods belonging to another person", both at 9% CGST plus 9% SGST.
Comparison
Two Ways to Run the Same Crusher
| Point | You sell your own aggregate | You crush a contractor's boulders |
|---|---|---|
| What you supply | Goods (heading 2517) | Service (heading 9988 or 9989 job work / processing) |
| GST rate | 5% | 18% |
| Value on the invoice | Full price of the aggregate | Crushing charge only |
| GST registration limit | Rs 40 lakh (Rs 20 lakh in Telangana and five other States) | Rs 20 lakh (Rs 10 lakh in four NE States) |
| TDS by the payer | 0.1% under 194Q / 393(1) Sl. 8(ii), only for large buyers above Rs 50 lakh | 194C / 393(1) Sl. 6(i): 1% if you're an individual or HUF, 2% otherwise |
| Inverted duty refund possible? | Possible under Section 54(3)(ii), on input credit only | Unlikely, output 18% is at or above input rates |
Source: Notifications 9/2025, 11/2017 and 15/2025-Central Tax (Rate); Sections 22 and 54, CGST Act; Sections 194C and 194Q, Income-tax Act 1961; Section 393, Income-tax Act 2025
Worked example. A Nalgonda crusher crushes 10,000 tonnes of a contractor's boulders at Rs 150 a tonne. The charge is Rs 15,00,000. GST at 18% is Rs 2,70,000 (Rs 1,35,000 CGST and Rs 1,35,000 SGST). If the same plant had bought the boulders and sold 10,000 tonnes of aggregate at Rs 900 a tonne, the invoice value would be Rs 90,00,000, and GST at 5% would be Rs 4,50,000. Keep the two kinds of work on separate invoices with separate HSN and SAC lines.
Registration, composition and credit on machinery
Registration limit. If all you do is sell goods, Section 22(1) and Notification 10/2019-Central Tax set Rs 40 lakh in States that adopted it. Telangana, Arunachal Pradesh, Meghalaya, Puducherry, Sikkim and Uttarakhand kept Rs 20 lakh, and Manipur, Mizoram, Nagaland and Tripura have Rs 10 lakh. The Rs 40 lakh option is only for persons "engaged exclusively in the supply of goods". One crushing contract or a month of hiring out your loader takes you to Rs 20 lakh.
Composition scheme. Crushed stone isn't on the barred list. Notification 14/2019-Central Tax, as amended, bars manufacturers of ice cream, pan masala, tobacco, aerated water, fly ash bricks and aggregates, building bricks and earthen roofing tiles. A crusher can opt in if its previous year's turnover was within Rs 1.5 crore (Rs 75 lakh in eight special States), paying 0.5% CGST plus 0.5% SGST, so 1% in all (Rule 7, CGST Rules). In practice most crushers don't. You can't make inter-State sales (Section 10(2)(c)), your registered buyers lose their 5% credit, and you can't claim back the 18% paid on a Rs 40 lakh machine.
Credit on capital goods, and why it isn't refunded. Under the regular scheme, GST on a new cone crusher, VSI, screen or loader is input tax credit you can set off against output tax. When credit piles up because your output is only 5%, Section 54(3)(ii) of the CGST Act allows a refund of accumulated credit "on account of rate of tax on inputs being higher than the rate of tax on output supplies". But Rule 89(5) limits Net ITC to "input tax credit availed on inputs". Credit on capital goods and input services is never refunded. It just carries forward.
Step-by-Step Guide
Monthly GST Working for a Crusher (Regular Scheme)
1. Output tax
8,000 tonnes of aggregate at Rs 900 = Rs 72,00,000. GST at 5% = Rs 3,60,000.
2. Credit on inputs
Explosives Rs 6,00,000 at 18% = Rs 1,08,000. Jaw plates, screens and belts Rs 4,00,000 at 18% = Rs 72,000. Total Rs 1,80,000.
3. Net after input credit
Rs 3,60,000 minus Rs 1,80,000 = Rs 1,80,000 still payable.
4. Credit on a new machine
A Rs 40,00,000 cone crusher bought this month carries Rs 7,20,000 GST. Rs 1,80,000 of it clears the balance, so no cash is paid.
5. Carry forward, no refund
Rs 7,20,000 minus Rs 1,80,000 = Rs 5,40,000 stays in the credit ledger for later months. It isn't refundable as inverted duty because it's capital goods credit (Rule 89(5)).
Source: Section 54(3), CGST Act 2017; Rule 89(5), CGST Rules 2017; rates from Notification 9/2025-Central Tax (Rate)
Diesel for your generators, loaders and tippers is outside GST (Section 9(2), CGST Act), so there's no credit on it at all. It's a straight cost in your books.
E-way bills. A registered supplier must generate an e-way bill when a consignment is worth more than Rs 50,000, counting the GST on the invoice (Rule 138(1) and Explanation 2, CGST Rules). A 25-tonne tipper of 20 mm metal at Rs 900 a tonne is Rs 22,500 plus Rs 1,125 GST, Rs 23,625 in all, so it's under the Rule 138(1) limit; a 40-tonne trailer of granite blocks usually isn't. Check your State's own limit for movement within the State, as the State GST rules can differ. Rule 138(14)(n) also exempts trips of up to 20 km to a weighbridge and back, if a delivery challan goes with the load.
Royalty and lease payments. Payments you make to the State mines department for your quarry lease aren't covered by a specific rule in this guide. Services supplied by a State Government to a business entity are generally taxed under reverse charge (S. No. 5 of Notification 13/2017-Central Tax (Rate)), but how that applies to your royalty, seigniorage and permit fees depends on your lease terms. Get these reviewed separately before you file.
Income tax for crusher and quarry owners
Most crushers are run as proprietorships or partnership firms. Both can use presumptive taxation, and both often outgrow it.
Comparison
Income Tax Rules for a Stone Crusher
| Rule | FY 2025-26 (1961 Act) | From 1 April 2026 (2025 Act) |
|---|---|---|
| Presumptive profit | Section 44AD: 6% of bank or UPI receipts, 8% of the rest | Section 58(2), Table Sl. No. 1: same rates |
| Turnover limit for presumptive scheme | Rs 2 crore, or Rs 3 crore if cash receipts are within 5% | Same limits |
| Tax audit (not on 44AD) | Turnover above Rs 1 crore, or Rs 10 crore if cash receipts and payments are each within 5% (Section 44AB(a)) | Section 63, Table Sl. No. 1: same tests |
| TDS you deduct on tipper and truck hire | Section 194C: 1% to individual or HUF, 2% to others, above Rs 30,000 a bill or Rs 1 lakh a year | Section 393(1), Table Sl. No. 6(i) |
| No TDS for small transporters | Owner of 10 or fewer goods carriages who gives a declaration with PAN (Section 194C(6)) | Section 393(4), Table Sl. No. 8 |
| TDS on large buyers' purchases from you | Section 194Q: 0.1% above Rs 50 lakh, buyer turnover above Rs 10 crore | Section 393(1), Table Sl. No. 8(ii) |
Source: Income-tax Act 1961 (as amended by Finance Act 2025); Income-tax Act 2025 (as amended by Finance Act 2026)
Worked example (AY 2026-27). Ravi's crusher, a proprietorship, sold aggregate worth Rs 1,80,00,000 in FY 2025-26. Rs 1,70,00,000 came through bank transfers from contractors and Rs 10,00,000 was cash from small builders.
- 6% of Rs 1,70,00,000 = Rs 10,20,000.
- 8% of Rs 10,00,000 = Rs 80,000.
- Presumptive profit: Rs 11,00,000.
His turnover is within Rs 2 crore, so he qualifies even though cash is 5.6% of receipts (10 ÷ 180). Under 44AD he can't claim depreciation separately; Section 44AD(2) treats it as already allowed. If his real profit is lower, say because the new cone crusher's depreciation and blasting costs ate the margin, he can declare less. He then needs books of account and a tax audit, because his total income would exceed the basic exemption limit (Section 44AD(5)). Once he's off 44AD, his Rs 1.8 crore turnover also crosses the Rs 1 crore audit test in Section 44AB(a). The higher Rs 10 crore limit doesn't help him, because his cash receipts are above 5%.
TDS on tippers. If your crusher is a firm or company, or a proprietorship whose turnover crossed Rs 1 crore in the previous year, you're a "specified person" and must deduct TDS on hire of tippers and trucks above Rs 30,000 a bill or Rs 1 lakh a year. Collect the PAN and the 10-vehicles-or-fewer declaration from small truck owners before you pay them, so you can skip deduction legally.
Cash to truck owners. A cash payment above Rs 10,000 a day to one person is disallowed. For plying, hiring or leasing goods carriages the limit is Rs 35,000 (Section 40A(3) and (3A) of the 1961 Act; Section 36(4) to (6) of the 2025 Act). Pay tipper owners by bank or UPI.
Deadlines right now. If your FY 2025-26 accounts were audited, the return is due by 21 November 2026 (CBDT Circular 07/2026). If you weren't liable to audit and missed the original date, a belated return under Section 139(4) can still be filed until 31 December 2026, with a late fee of Rs 5,000, or Rs 1,000 if total income is within Rs 5 lakh (Section 234F).
Common mistakes crusher owners make
- Billing job work at 5%. Crushing a contractor's boulders is a service at 18%. The 5% job work entry doesn't list stone.
- Claiming the Rs 40 lakh limit with crushing or hire income. Any service income drops the limit to Rs 20 lakh, and in Telangana it's Rs 20 lakh anyway.
- Filing a refund claim for machinery credit. Inverted duty refunds exclude capital goods. Budget for the credit to be used over several months instead.
- Paying tipper owners without PAN declarations. Without the 10-vehicle declaration, you owe 1% or 2% TDS, and missing TDS leads to disallowance of 30% of the expense under Section 40(a)(ia).
- Mixing sawn slabs with blocks on one invoice line. Granite blocks are 5%, slabs are 18%. Bill them on separate lines with their own HSN codes.
How Tax Garden helps crushers and quarries
We look at how you actually earn, own aggregate sales, crushing contracts or both, and set up your GST invoicing and HSN or SAC codes to match. Our GST registration service gets you a GSTIN if you need one, and our GST return filing service handles monthly returns with credit on explosives, spares and machinery tracked properly. Our TDS filing service covers deductions on tipper hire, and at year end our ITR filing service and accounting and bookkeeping service cover the 44AD return or audited books.
For background, see our guides to GST on construction materials like cement, steel and bricks, GST and income tax for ready-mix concrete plants, GST and income tax for JCB and crane hire owners, inverted duty refunds under Section 54 and Rule 89, TDS on transport charges and the small transporter exemption and Section 44AD presumptive taxation.
