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The red brick industry has requested the government to lower GST on bricks to 5 per cent and remove them from the Special Composition Scheme. While sand lime bricks received a reduction, all other bricks remain at 6 per cent GST and 12 per cent with ITC. Industry leaders point out that bricks contribute around 10 per cent of construction costs and that higher coal GST is raising production expenses for brick kilns employing millions of workers. The government has not yet acted on the broader demand, keeping the rate unchanged.
The red brick industry has urged the government to lower GST rates on bricks to 5 per cent and remove the sector from the Special Composition Scheme. Currently, all types of bricks under this scheme attract 6 per cent GST and 12 per cent with input tax credit (ITC), while the GST threshold applies to businesses with turnover above INR 20 lakh. Advertisement
The GST Council recently introduced a two-slab GST system of 5 per cent and 18 per cent, replacing the earlier four-rate structure. This reform was aimed at boosting consumption across the country. While the council reduced the rate for sand lime bricks from 12 per cent to 5 per cent, all other types of bricks continue to face 6 per cent GST and 12 per cent with ITC under the Special Composition Scheme.
Industry representatives have highlighted that bricks, similar to cement, are a crucial material in construction, accounting for around 10 per cent of the total project cost. This applies to housing projects, hospitals, schools, and hotels. Omvir Singh Bhati, General Secretary of the All India Brick and Tile Manufacturers Federation (AIBTMF), said that reducing GST on bricks would improve affordability for both individual homeowners and developers of housing projects.
Bhati also noted that higher GST on coal, an essential input for brick kilns, increases production costs for the industry. The brick sector employs approximately 30-40 million workers, many of whom are paid above the minimum wage. He added that the industry had expected the GST rate on bricks to be reduced to 5 per cent, similar to other construction materials like cement, which saw its GST lowered from 28 per cent to 18 per cent. However, the government did not consider this request in the recent GST Council meeting, leaving the 12 per cent GST rate under the special composition scheme unchanged.
The industry stresses that the current GST structure affects both small-scale brick makers and large developers. While cement has seen tax relief to make construction more affordable, bricks remain comparatively expensive, impacting project costs and housing affordability. The call for a reduction is also linked to the rising input costs due to coal taxation and its effect on the livelihoods of millions of kiln workers.
Source PTI
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