Last updated: February 23rd, 2024 5:25 PM

New GST Rate for Brick Manufacturing Sector

The Central Board of Indirect Taxes and Customs (CBIC) has issued a New GST Rate for Brick manufacturing vide the notifications dated 31^st March 2022. With this Notification, the Government has increased the GST rates for Fly Ash Bricks, Blocks, Building Bricks, and roofing tiles to 12% with Input Tax Credit (ITC)  and 6% without ITC from the existing rate of 5%. These notifications came into effect from 1^st April 2022. The present article briefs theNew GST Rate for Brick Manufacturing Sector. GST Rate for Construction and Building Materials

Revised GST Rate for Brick Manufacturing Sector

GST on certain varieties of bricks has been hiked from 5% to 12% from 1^st April 2022 and norms related to input tax credit have also been changed. The rate structure implemented by the Government is an outcome of the recommendations of the 45^th GST Council meeting.

• The brick manufacturing Sector can opt for a composition scheme to pay a 6% GST without input tax credit (ITC) beginning, higher than 5% earlier.
• Building bricks, earthen or roofing tiles, fly ash bricks and blocks, and bricks of fossil meals can opt for a composition scheme.
• Those businesses who do not wish to opt for the composition scheme would be subject to 12% Goods and Services Tax (GST) with ITC.

Applicability of Revised GST Rate

All brick manufacturers with a turnover above Rs.20 lakh are required to be registered and pay GST at the above rates. Earlier, the limit was Rs 40 lakh. As mentioned above, the Government has notified a revised tax structure for the Brick Kilns sector effective from 1^st April 2022. In this new tax structure, the Government has provided the GST rate of 12% (with ITC) or 6% (without ITC) for the below products:

S. No.	Tariff item, sub-heading, heading, or Chapter	Description
1.	6815	Fly ash bricks of fly ash aggregate with 90 percent. or more fly ash content; Fly ash blocks
2.	6901 00 10	Bricks of fossil meals or similar siliceous earth
3.	6904 10 00	Building bricks
4.	6905 10 00	Earthen or roofing tiles

Earlier GST Rate Structure for Brick Manufacturing

Prior to April 01, 2022, the suppliers of Construction and Building Materials could either opt for the composition scheme  (1% GST without ITC) or the normal scheme (5% GST with ITC) in order to discharge their GST liability.

New GST Rate structure for Brick Manufacturing

• Under the new tax rates structure, the Government has notified a higher rate of GST which is12% on the specified products, where the benefit of claiming ITC would be available to the supplier.
• Alternatively, the specified products can be supplied with the lower GST rate of 6% with a condition that the benefit of ITC would not be available in respect of goods or services used (exclusive or common) in supplying such goods.
• The suppliers of the specified products would no longer be able to avail of the benefit of the composition scheme under Section 10 of the CGST Act.
• The threshold limit of registration for such suppliers has also been decreased from Rs. 40 lakhs to Rs. 20 lakhs. In other words, the supplier of specified products would be required to register as a normal taxpayer under the GST law if their aggregate turnover in the financial year exceeds Rs. 20 lakhs.