GST on Cement in India: Find Cement GST Rate and HSN Code

What Is the GST on Cement Bags?

The GST rate on cement bags is set at 28%. This rate is part of the Goods and Services Tax (GST) regime, which aims to simplify the tax structure in India by consolidating various indirect taxes into a single tax. The high GST rate on cement impacts the overall construction cost, making it a significant factor for builders and developers to consider when budgeting for projects.

Read More: GST Rates in India – 2025

Why 28% GST on Cement?

The cement GST rate is kept at 28% due to concerns over revenue loss for the government. Reducing this rate could lead to a loss of ₹13,000 crore annually. Since the government is a major consumer of cement for infrastructure projects, any rate reduction without clear consumer benefits could impact tax revenues and pricing strategies. The cement industry’s history of limited competition and cartelization has also made the government cautious about cutting the tax rate.

List of GST on Cement and Manufactured Products

GST on Cement: Pre-GST vs Post-GST

Before the introduction of GST on cement in India, it was subject to a complex tax structure, including a central excise duty of 12.5%, ₹125 per metric tonne (PMT), and a standard VAT rate of 14.5%. This resulted in a total tax incidence exceeding 31% when accounting for CST, octroi, and entry taxes. Post-GST, the tax on cement was simplified to a flat rate of 28%, lowering the overall tax burden slightly while streamlining the taxation process.

How to Calculate GST on Cement?

To calculate Goods and Service Tax on cement, apply the standard 28% GST rate.

Here’s a simple formula to use:

GST Amount = (Cost of Cement * GST Rate) / 100

Example of calculating GST on Cement 

GST Amount = (500 * 28) / 100 = ₹140

Thus, the total cost of the cement bag, including GST, would be:

Total Price = ₹500 + ₹140 = ₹640

This method ensures accurate pricing for sellers and buyers while complying with the GST regulations.

What is the GST rate on sand and bricks in 2025?

In 2025, the Goods and Services Tax (GST) rates for construction materials like sand and bricks are as follows:

• Natural Sand attracts 5% GST
• Normal red bricks and fly ash bricks attract a 5% GST.
• Cement bricks and certain other types may incur a 12% GST.
• Higher-end bricks and specific construction materials can attract up to 28% GST.

The Impact of GST on Cement Manufacturing Companies and Industries in India

1. Simplified Tax Compliance

The 28% GST on cement replaced a multi-tax system (excise duty, VAT, central sales tax), streamlining compliance and improving operational efficiency for manufacturers.

2. Increased Cost of Production

The high GST on cement has increased production costs, which are often passed on to consumers. This affects affordability, especially in the affordable housing sector.

3. Investment in Supply Chain Management

Cement manufacturers have invested in supply chain systems to meet GST regulations, improving inventory management and reducing turnaround times, despite the initial cost strain.

4. Impact on Transportation Costs

GST has streamlined transportation by reducing transit delays, the high GST on cement still drives up transportation costs, impacting the final price of cement.

5. Warehousing Efficiency

GST on cement allows for warehouse consolidation, reducing underutilization and improving distribution. However, the 28% GST rate can increase overall warehousing costs for manufacturers.

6. Increased Component Costs

GST on cement has raised the costs of various inputs in cement production, such as limestone, clinker, and transportation. Higher GST rates on these components contribute to elevated production costs, directly impacting pricing strategies.

The Impact of GST on Cement for Real Estate Industries in India

1. Altered GST Rates on Properties

The reduction of GST on houses under construction in the luxury segment from 12% to 5% aims to stimulate demand in the real estate market. However, this reduction is offset by the lack of Input Tax Credit (ITC) benefits, which can hinder the overall financial advantage for builders.

2. Increased Cost of Construction

Despite the lower GST rate on luxury homes, the high GST on cement (28%) continues to elevate construction costs. This can lead to increased pricing for consumers in the real estate market, making housing less affordable.

3. Impact on Housing Demand

The rising costs due to GST on cement and other construction materials may deter potential buyers from investing in new homes. As construction costs rise, developers may need to pass these costs onto consumers, affecting overall housing demand.

4. Compromised Profitability for Developers

The non-availability of ITC means that developers cannot reclaim GST on cement and other materials used. This limitation affects their profitability, especially in an environment where margins are already tight.

5. Inflationary Pressure on Prices

Experts predict that as prices continue to rise due to high GST on cement and increased demand from infrastructure projects, overall pricing in the real estate market will also escalate. This can create inflationary pressures, further complicating affordability for consumers.

6. Increased Project Costs

Developers might need to budget more for cement procurement due to its high taxation. This can lead to cost overruns on projects and potentially result in project delays as companies reassess their financial plans.

Conclusion

The 28% GST rate on cement continues to elevate construction costs, impacting both the real estate and infrastructure sectors, particularly in terms of affordability. Developers and builders must account for these expenses in their financial planning. Utilising tools like a GST calculator can help manage these costs effectively, ensuring more accurate budgeting and planning for future projects.

Frequently Asked Questions (FAQs)

1. What is the GST on White Cement?

White cement GST rate is 28% in India as it is classified under HSN Code 252321. 

2. Is GST applicable to all cement products in India?

Yes, GST applies to all cement products in India, with a standard rate of 28% for most types of cement, including Portland, slag, and aluminous cement.

3. Who is liable to pay GST on cement?

All businesses that supply cement must pay Goods and Services Tax (GST). This includes all cement companies, regardless of their size. 

4. What is the Ambuja Cement Bag GST Rate?

Ambuja cement bags attract a GST rate of 28%, consistent with the general rate applied to most cement products.

5. What is the JK Cement Bag GST Rate?

JK cement bags also have a GST rate of 28%, which aligns with the standard rate for cement.

6. What is the Shree Cement Bag GST Rate?

GST on cement bags of Shree Cement is subject to a rate of 28%.

7. What is the Dalmia Cement Bag GST Rate?

Dalmia Cement bags carry a GST rate of 28%.

8. What is the Prime Gold Cement Bag GST Rate?

Prime Gold Cement bags are taxed at a GST rate of 28%.

9. What is the Ramco Cement Bag GST Rate?

Ramco Cement bags also have a GST rate of 28%.

10. What is the India Cements Bag GST Rate?

India Cements bags attract a GST rate of 28%.

11. How does GST affect the export of cement from India?

GST simplifies the export taxation process, allowing exporters to claim input tax credits. This can make Indian cement more competitive in international markets. However, under the GST regime, exports of both goods and services are not taxed.

12. Are there any exemptions or reductions in GST for certain types of cement?

There are no specific exemptions or reductions in GST for particular types of cement.

13. What are the implications of GST on the informal cement manufacturing sector?

The implementation of GST has increased compliance requirements, which may burden informal manufacturers who often operate outside regulatory frameworks. This could lead to reduced competitiveness compared to formal players who can benefit from input tax credits and streamlined processes.

14. What is the GST rate for cement used in affordable housing?

The government has reduced the GST rates for cement used in affordable housing to 12%

15. What is the GST rate for cement used for the construction of metro and monorail projects?

The GST rate for cement used for the construction of metro and monorail projects is 12%.