Looking for expert help with Income tax and GST for tiles and sanitaryware shop 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
- Ceramic tiles, vitrified tiles, sanitaryware, taps and valves are all 18% GST (Notification 9/2025-Central Tax (Rate), Schedule II).
- Marble and granite blocks dropped from 12% to 5% on 22 September 2025. Slabs, polished stone and cut-to-size pieces stay at 18%.
- Contractors doing works contracts can claim ITC on your tiles; households and businesses building on their own account can't (Section 17(5)(d), CGST Act). That one fact decides whether composition suits you.
- If you supply and fix tiles in a building for one price, that's a works contract, taxed as a service, not a sale of tiles.
- Section 44AD deems 6% profit on digital receipts and 8% on cash for AY 2026-27.
What is the GST rate on tiles and sanitaryware in India? From 22 September 2025, ceramic and vitrified tiles (HSN 6907), ceramic sanitaryware (6910), plastic sanitaryware (3922), steel sinks (7324) and taps (8481) are all 18% GST. Marble and granite blocks are 5%, but marble and granite slabs are 18% (Notification 9/2025-Central Tax (Rate)).
A tile showroom is simpler on rates than a gift or hardware shop. Almost everything on the floor is 18%. The work is elsewhere: stone, where the same marble can be 5% or 18% depending on its form; contractor customers, who need your tax invoice to claim credit; and fitting jobs, which turn a sale of goods into a works contract. This guide covers each, then your AY 2026-27 income tax return. If you also sell paint, pipes and hardware, our hardware and paint shop guide covers those items.
Which GST rate applies to each item in a tile showroom?
The September 2025 changes left tiles and sanitaryware at 18%. The only big rate cut in this trade was on raw stone blocks.
Comparison
GST Rates for Tiles, Stone and Sanitaryware (from 22 September 2025)
| Item | HSN | GST rate |
|---|---|---|
| Ceramic floor and wall tiles, including vitrified tiles; ceramic mosaic | 6907 | 18% |
| Ceramic flooring blocks, support or filler tiles | 6904 | 18% |
| Cement tiles, paver blocks and other articles of cement or artificial stone | 6810 | 18% |
| Glass tiles, paving blocks and glass mosaic | 7016 | 18% |
| Ceramic wash basins, WC pans, cisterns, urinals, bathtubs | 6910 | 18% |
| Plastic sanitaryware, WC seats and covers, plastic cisterns | 3922 | 18% |
| Stainless steel sinks and sanitary ware of iron or steel | 7324 | 18% |
| Taps, cocks and valves (CP fittings, angle valves) | 8481 | 18% |
| Plastic pipes, hoses and fittings | 3917 | 18% |
| Tile adhesive, grout, putty and sealants | 3214 | 18% |
| Bathroom mirrors | 7009 | 18% |
| Marble and travertine slabs (other than blocks) | 2515 12 20, 2515 12 90 | 18% |
| Granite slabs (other than blocks) | 2516 12 00 | 18% |
| Worked or polished building stone; stone mosaic | 6802 | 18% |
| Marble and travertine blocks | 2515 12 10 | 5% |
| Granite blocks | 2516 | 5% |
| Kota-type calcareous building stone, not mirror polished | 2515, 6802 | 5% |
| Sandstone and similar building stone, merely cut into blocks or slabs | 2516 | 5% |
Source: Notification 9/2025-Central Tax (Rate): Schedule II S. No. 7, 8, 56, 118, 123, 218, 226, 235, 238, 240, 249, 255, 303, 466; Schedule I S. No. 176, 178, 179, 181
The stone lines are where bills go wrong. A granite block from the quarry is 5%. Once it's sawn into slabs (2516 12 00), it's 18%. So if you buy blocks and get them cut, you pay 5% on the purchase and charge 18% on the slabs you sell. Sandstone and Kota-type stone keep the 5% rate when they're only cut into slabs, but lose it once they're mirror polished and ready to lay.
Can your contractor customers claim input tax credit?
This question decides how you run the shop, so get it straight before you think about composition.
Section 17(5)(d) of the CGST Act blocks input tax credit (ITC) on goods a business uses to build immovable property on its own account. Tiles laid in a building become part of it. So who can claim ITC on your bill depends on who's building for whom:
Comparison
Who Can Claim ITC on Tiles and Sanitaryware?
| Buyer | Claims ITC on your 18%? | Why |
|---|---|---|
| Family building or renovating its own home | No | Not registered, or buying for personal use |
| Business fitting out its own office, shop or hotel | No | Section 17(5)(d): construction on own account |
| Contractor laying tiles for a client under a works contract | Usually yes | Goods used for a further supply of works contract, not own account |
| Another dealer buying stock for resale | Yes | Normal trading ITC |
Source: Sections 2(119), 16 and 17(5)(c), (d), CGST Act 2017
A contractor needs a tax invoice from a regular dealer. If you move to composition, you can only issue a bill of supply, and that contractor's cost goes up by the full GST.
Say a contractor buys Rs 1,00,000 of tiles plus Rs 18,000 GST. From a regular dealer, the net cost is Rs 1,00,000 after ITC. From a composition dealer at the same Rs 1,18,000 shelf price, the contractor pays Rs 1,18,000 and recovers nothing. Most contractors will move to another shop.
What if you supply and fix the tiles?
Many showrooms offer fitting. If you supply tiles and lay them in a customer's building for one price, the contract involves building work on immovable property with goods passing to the customer. That's a works contract under Section 2(119) of the CGST Act, and Schedule II treats it as a supply of services. You can't bill the whole job as "tiles at 18%" and call the labour part of the goods sale.
If you only sell the tiles and the customer hires a separate mason, it's a plain sale of goods. Keep the two apart on paper: a sale invoice for the goods, and a separate contract if your team does the fitting. The rate and ITC rules for works contracts are in our works contract GST guide.
Regular scheme or composition?
Under composition, a trader pays 1% of turnover (0.5% CGST plus 0.5% SGST, Rule 7, CGST Rules), up to Rs 1.5 crore turnover. You issue a bill of supply without GST, claim no ITC, and can't make sales to other states (Section 10(2)(c), CGST Act). Buying tiles from Morbi or another state is fine; the bar is only on selling out of state.
For a shop that sells mostly to households, the numbers can favour composition:
Comparison
One Month, Rs 5 Lakh of Sales at 18% (Retail Customers Only)
| Item | Regular scheme | Composition (trader) |
|---|---|---|
| Sales before GST | Rs 5,00,000 | Same shelf prices |
| GST-inclusive sales | Rs 5,90,000 | Rs 5,90,000 |
| Tax on sales | 18% x Rs 5,00,000 = Rs 90,000 | 1% x Rs 5,90,000 = Rs 5,900 |
| Stock bought: Rs 4,00,000 at 18% | ITC Rs 72,000 | Rs 72,000 becomes cost |
| GST paid in cash | Rs 90,000 - Rs 72,000 = Rs 18,000 | Rs 5,900 |
| Left after stock and GST | Rs 5,90,000 - Rs 4,72,000 - Rs 18,000 = Rs 1,00,000 | Rs 5,90,000 - Rs 4,72,000 - Rs 5,900 = Rs 1,12,100 |
Source: Rule 7, CGST Rules 2017; Section 10, CGST Act 2017; Notification 9/2025-Central Tax (Rate). Figures are illustrative.
On paper, this shop keeps Rs 12,100 more a month on composition. Now add contractors. If even Rs 1 lakh a month of those sales goes to contractors who'd leave over lost ITC, the shop loses the margin on that business, which can wipe out the gain. Look at your last year's GSTR-1 and check how much went out on B2B invoices to GSTINs before you switch. Our composition scheme guide covers the other conditions.
When do you need GST registration and e-way bills?
If you only sell goods, registration is required once aggregate turnover crosses Rs 40 lakh in most states. Telangana and several other states kept the Rs 20 lakh limit (Notification 10/2019-Central Tax), so a Hyderabad tile shop with Rs 25 lakh of sales must register. A single sale delivered to a buyer in another state needs registration from the first rupee (Section 24(i), CGST Act). See our GST registration service.
Tiles are heavy and bulky, so almost every delivery goes by truck. An inter-state movement of goods worth more than Rs 50,000 needs an e-way bill (Rule 138, CGST Rules), and each state sets its own limit for movement within the state. Check yours in our state-wise e-way bill limits guide.
How is your income taxed for AY 2026-27?
Step-by-Step Guide
Choosing How to Report Tile Shop Income
Check Section 44AD eligibility
Resident individual, HUF or partnership firm (not LLP). Turnover up to Rs 2 crore, or up to Rs 3 crore if cash receipts are within 5% of total receipts.
Split receipts by mode
UPI, card, cheque and bank receipts count at 6%. Cash receipts count at 8%.
Compare with your real profit
If your books show less than the deemed profit, declaring actual profit may cost less tax, but brings books and audit duties.
Check the audit limit if you keep books
Section 44AB(a) audit applies above Rs 1 crore turnover, or Rs 10 crore if cash receipts and cash payments are each within 5%.
File the right form
ITR-4 for Section 44AD if total income is within Rs 50 lakh and other conditions are met; ITR-3 if you keep full books.
Source: Sections 44AD, 44AB and 87A, Income-tax Act 1961; Finance Act 2025
Example 1 (neighbourhood tile shop, new regime): Turnover Rs 1.5 crore, of which Rs 1.35 crore by UPI, card and bank, and Rs 15 lakh in cash. Cash is 10% of receipts, so the Rs 2 crore limit applies, and the shop is within it.
- Deemed profit: 6% of Rs 1,35,00,000 (Rs 8,10,000) plus 8% of Rs 15,00,000 (Rs 1,20,000), so Rs 9,30,000.
- Tax: Rs 20,000 on Rs 4-8 lakh, plus 10% of Rs 1,30,000 (Rs 13,000). Total Rs 33,000.
- The Section 87A rebate (income up to Rs 12 lakh) wipes it out. Tax payable: nil.
Example 2 (tiles and sanitaryware showroom, new regime): Turnover Rs 2.8 crore, with Rs 11.2 lakh (4%) received in cash. Cash is within 5%, so the Rs 3 crore limit applies.
- Deemed profit: 6% of Rs 2,68,80,000 = Rs 16,12,800, plus 8% of Rs 11,20,000 = Rs 89,600. Total Rs 17,02,400.
- Tax: nil up to Rs 4 lakh, Rs 20,000 on Rs 4-8 lakh, Rs 40,000 on Rs 8-12 lakh, Rs 60,000 on Rs 12-16 lakh, and 20% of Rs 1,02,400 = Rs 20,480. Total Rs 1,40,480.
- No 87A rebate, as income is above Rs 12 lakh. Add 4% cess of Rs 5,619. Tax payable: Rs 1,46,100.
If you use Section 44AD, the whole year's advance tax is due by 15 March (Section 211(1)(b)). See our Section 44AD guide and old vs new regime guide.
Common mistakes tile shops make
- Billing granite slabs at 5%. The 5% rate is for blocks. Slabs and polished stone are 18%. Match the HSN on your sale bill to what you're actually selling, not to what you bought.
- Switching to composition without checking B2B sales. Contractors lose their 18% ITC on your bills the day you switch.
- Billing a supply-and-fix job as a sale of tiles. Laying tiles in a building for one price is a works contract, taxed as a service.
- Sending a truck out of state without registration or an e-way bill. Both rules apply from the first inter-state sale.
- Taking Rs 2 lakh or more in cash for one order. Receiving Rs 2 lakh or more in cash from one person for one transaction breaks Section 269ST, and a full bathroom order can easily cross it. See our cash transaction limits guide.
How Tax Garden helps tile and sanitaryware shops
We map GST rates to every tile, stone and fitting code in your billing, file GSTR-1 and GSTR-3B, and check each year whether composition still suits your customer mix. See our GST return filing service. We also prepare your ITR and compare Section 44AD with your actual profit; see our ITR filing service and pricing.
