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GST on Bricks - Fly Ash Bricks and Red Bricks HSN Code and GST Rate

By Annapoorna

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Updated on: Mar 14th, 2023

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5 min read

The Indian government on 31st March 2022 notified some changes on bricks manufacturers, which came into effect from 1st April 2022.

Hike in GST Rates for Brick Industry

Brick kilns can opt for a composition scheme and pay Goods and Services Tax (GST) at 6% without claiming any input tax credit (ITC) from 1st April 2022. Businesses not willing to opt for the composition scheme will be subjected to pay GST at 12% and be allowed to avail ITC.

As per the notification issued by the Indian government on 31st March 2022, building bricks, fly ash bricks and blocks, earthen or roofing tiles, and bricks of fossil meals could opt for the composition scheme. The GST on manufacturing and trading bricks were charged at 5%, and businesses could claim the credit on the inputs. The GST Council already decided in September last year to bring brick kilns under the purview of a special composition scheme.

Bricks GST Rate

The CBIC has notified the following GST rates for bricks of various kinds, including fly ash bricks-

Item descriptionHSN codeGST rate
Sand lime bricks , also for stone inlay work6812%
Fly ash bricks or aggregates or blocks681512%
Fossil meals bricks or bricks of similar siliceous earths6901 00 10 12%
Building bricks6904 10 00 12%
Refractory bricks690218%
Bricks of pressed or moulded glass701618%

Changes in Threshold to Register and Pay GST

All the brick manufacturers with an annual turnover exceeding Rs.20 lakh (or the threshold notified for the north-eastern state) need to be registered under the GST regime and pay GST at new rates notified by the government. Earlier, this threshold was Rs.40 lakh.

What has changed after the Notification for the brick manufacturers?


Particulars

Earlier

As of now




Turnover threshold for GST registration

The point for GST registration earlier was only if the annual turnover exceeded Rs.40 lakhs

As per Notification No. 03/2022-Central Tax, the threshold for GST registration has been reduced to Rs.20 lakhs




Composition scheme eligibility for registered person




Earlier a registered person could opt for the composition scheme if the aggregate annual turnover in the previous year didn’t exceed Rs.1.5 crores

As per Notification No. 04/2022-Central Tax, a registered person cannot opt for composition scheme. However, as per Notification No. 02/2022-Central Tax, such a registered person can avail the special composition scheme and pay GST at 6% without availing of the ITC.

GST Rates for individuals not opting for the composition scheme

Earlier, a registered person involved in manufacturing & trading of bricks was charged GST at 5% and could claim a credit on inputs.

As per Notification No. 02/2022-Integrated Tax (Rate), the GST rate has been increased to 12% with ITC.

FAQs on GST on Bricks:

Does a supplier who opts to supply such goods at 12% need to reverse the ITC on the stock purchased before 1st April 2022?

The supplier would not be required to reverse any ITC.

Persons registered under the composition scheme; how can they opt for the new tax structure?

Firstly, a registered person must withdraw from the existing composition scheme on the GSTN portal by applying the Form GST CMP-04. After the withdrawal from the current scheme, such a registered person would automatically be considered under the normal scheme.

What are the GST implications of the new scheme?

The implications of the new scheme for the registered persons would be as under:

  • No benefits of the composition scheme -From 1st April 2022, the suppliers aren’t eligible for the previous composition scheme. Hence, they must opt out by filing Form GST CMP-04 on the GST portal.
  • Issuance of tax invoices – A taxpayer transitioning from the last scheme composition to the new scheme is now required to issue a tax invoice instead of the supply bill for supplying specified products.
  • Filing monthly/quarterly returns – A taxpayer would now be required to file the monthly return in Form GSTR-1 and GSTR-3B. The supplier can opt for the Quarterly Return and Monthly Payment (QRMP) scheme if eligible.

What are the other benefits for the Taxpayers opting to pay tax at 6%?

The new scheme isn’t like the composition scheme under Section 10 of the CGST Act. The Indian government hasn’t notified any other benefits apart from the lower GST rate. A taxpayer would need to comply with all the general provisions under the GST law, such as issuing documents under GST,

  • Filing regular returns,
  • Payment of GST as per the rate notifications, etc.

What is the effect of the notification on the suppliers of specified products who aren’t registered under GST due to lower aggregate turnover?

Suppliers supplying the specified products are now liable to register under the GST regime if their annual aggregate turnover exceeds Rs.20 lakhs. The threshold limit for GST registration has been now reduced to Rs.20 lakhs. Where such supplier applies for GST registration within 30 days from becoming liable for GST registration, such supplier would be eligible to avail input tax credit on the stock available as of 1st April 2022.

What is the HSN code for building bricks?

The HSN code for building bricks is 6904 10 00
 

About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

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Quick Summary

The Indian government notified changes for brick manufacturers including a hike in GST rates from 1st April 2022, with an option of a composition scheme at 6% GST. The threshold for GST registration was reduced to Rs.20 lakhs. Key changes include new GST rates for various types of bricks and eligibility criteria for composition scheme.

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