The Indian government on 31st March 2022 notified some changes on bricks manufacturers, which came into effect from 1st April 2022.
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.
Latest update:
21st December 2024
The 55th GST Council meeting recommended reducing the GST rate Autoclaved Aerated Concrete (AAC) blocks containing more than 50% fly ash content, having HSN code 6815 to12%. Earlier it attracted 18% GST rate. *This was done keeping in mind to make these blocks more competitive in the market and encourage the construction industry to adopt more sustainable building materials. AAC blocks containing more than 50% fly ash are considered eco-friendly because fly ash is a byproduct of coal combustion and incorporating this in construction promotes reduction in waste.
*The same would be given effect through the relevant circulars/ notifications.
The CBIC has notified the following GST rates for bricks of various kinds, 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% |
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.
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. |