GST Rates on Construction Services & Materials (India)

Last Updated on September 15, 2025 by Admin

Rate change kicking in: September 22, 2025 (most goods & services; tobacco/pan masala/cigarettes excluded). Here’s a crisp, field-ready reference for contractors, developers, and project accountants. Use the “till Sep 21” column for invoices raised before the switchover and the “from Sep 22” column after the change takes effect.

Table of Contents

What’s new in September 2025 (quick read)

India moves to a two-slab structure: 5% and 18% (12%/28% pruned).
Cement (HSN 2523) drops to 18%; marble/travertine & granite blocks to 5%; sand-lime bricks/stone inlay work to 5%.
Works contract (Govt. predominantly earthwork & offshore O&G) moves to 18%. Job-work for bricks/pharma/leather/printing/umbrellas to 5% (with ITC = Input Tax Credit); residual job-work now 18%.

Always verify your exact HSN/SAC and scope with the final CBIC notifications linked below.

Construction Services (SAC)

Works contract – general construction/repair/renovation

SAC: 9954
Rate (till Sep 21, 2025): 18%
Rate (from Sep 22, 2025): 18% (no change)
ITC: With ITC
Notes: Default entry under Notification 11/2017 (as amended).

Works contract – predominantly earthwork (>75%) provided to the Government

SAC: 9954
Rate (till Sep 21, 2025): 12%
Rate (from Sep 22, 2025): 18%
ITC: With ITC
Notes: As per the GST Council 56th meeting decisions, Government earthwork is aligned to 18%.

Sub-contractor supplying to the above Government earthwork contract

SAC: 9954
Rate (till Sep 21, 2025): 12%
Rate (from Sep 22, 2025): 18%
ITC: With ITC
Notes: Parity with the main contractor from September 22, 2025.

Works contract – offshore oil & gas exploration and production in offshore area

SAC: 9954
Rate (till Sep 21, 2025): 12%
Rate (from Sep 22, 2025): 18%
ITC: With ITC
Notes: Rationalised to 18%.

Residential apartments – Affordable (2019 scheme)

SAC: 9954
Rate (till Sep 21, 2025): 1%
Rate (from Sep 22, 2025): 1% (no change)
ITC: No ITC
Notes: Affordable definition and 80% registered procurement rule apply (RCM on shortfall).

Residential apartments – Other than affordable (2019 scheme)

SAC: 9954
Rate (till Sep 21, 2025): 5%
Rate (from Sep 22, 2025): 5% (no change)
ITC: No ITC
Notes: New rate scheme continues.

Commercial apartments in RREP (with ≤15% commercial area)

SAC: 9954
Rate (till Sep 21, 2025): 5%
Rate (from Sep 22, 2025): 5% (no change)
ITC: No ITC
Notes: RREP-specific entry under the 2019 scheme.

Commercial apartments (non-RREP)

SAC: 9954
Rate (till Sep 21, 2025): 12%
Rate (from Sep 22, 2025): 12%*
ITC: With ITC
Notes: *No explicit GST Council change was notified in the press release; check the final CBIC notification.

Job-work in relation to bricks

SAC: 9988
Rate (till Sep 21, 2025): 12%
Rate (from Sep 22, 2025): 5%
ITC: With ITC
Notes: Concessional job-work rate applicable from September 22, 2025.

Real-estate scheme essentials (still applicable): Under the 1%/5% residential scheme, ITC is unavailable; promoters must procure ≥80% from registered suppliers. Shortfall attracts RCM @ the applicable rate (e.g., cement post-Sep 22 at 18%).

Construction Materials (Goods – HSN)

Cement (Portland, aluminous, slag, supersulphate, clinkers)

HSN: 2523
Rate (till Sep 21, 2025): 28%
Rate (from Sep 22, 2025): 18%
Notes: Headline rationalisation cut.

Marble/travertine blocks; Granite blocks

HSN: 2515 / 2516
Rate (till Sep 21, 2025): 12%
Rate (from Sep 22, 2025): 5%
Notes: Applies to blocks only (not polished slabs or tiles).

Sand-lime bricks / Stone inlay work

HSN: 6805 / 6815 (selected)
Rate (till Sep 21, 2025): 12%
Rate (from Sep 22, 2025): 5%
Notes: Specified entries rationalised.

Natural sand

HSN: 2505
Rate (till Sep 21, 2025): 5%
Rate (from Sep 22, 2025): 5% (no change)
Notes: Common construction sand.

Aggregates (pebbles, gravel, crushed stone, macadam)

HSN: 2517
Rate (till Sep 21, 2025): 5%
Rate (from Sep 22, 2025): 5% (no change)
Notes: Covers concrete, road metal, and ballast.

Ready-Mix Concrete (RMC)

HSN: 38245010
Rate (till Sep 21, 2025): 18%
Rate (from Sep 22, 2025): 18% (no change)
Notes: Non-refractory mortars and concretes.

Ceramic/vitrified tiles

HSN: 6907 / 6908
Rate (till Sep 21, 2025): 18%
Rate (from Sep 22, 2025): 18% (no change)
Notes: Includes glazed and unglazed floor and wall tiles.

Sanitaryware (ceramic)

HSN: 6910
Rate (till Sep 21, 2025): 18%
Rate (from Sep 22, 2025): 18% (no change)
Notes: WC pans, cisterns, basins, and similar sanitary items.

Iron & Steel (Chapter 72) — plates, coils, bars, TMT, etc.

HSN: 7206–7215 (typical)
Rate (till Sep 21, 2025): 18%
Rate (from Sep 22, 2025): 18% (no change)
Notes: Standard rate for most items under Chapter 72.

Articles of iron/steel (Chapter 73) — pipes, fabricated items

HSN: 73xx
Rate (till Sep 21, 2025): 18%
Rate (from Sep 22, 2025): 18% (no change)
Notes: Covers typical construction-use articles.

PVC/CPVC/UPVC pipes & fittings

HSN: 3917
Rate (till Sep 21, 2025): 18%
Rate (from Sep 22, 2025): 18% (no change)
Notes: Plastic pipes and fittings.

Transition & Compliance Checklist (Sep 2025)

Time of supply: Apply revised rates on supplies made on/after Sep 22, 2025; use current rates before that date.
Contracts & POs: Add a “taxes as applicable on the date of supply” clause; issue change orders where rates shift.
RCM (real-estate scheme): 80% registered purchase rule continues; pay RCM on shortfall. Cement under RCM becomes 18% from Sep 22.
ERP update: Map new rates for HSN 2523, 2515/2516 blocks, 6805/6815 items, and job-work SAC 9988 entries.
Advance receipts: Re-compute differential tax if supply crosses the changeover date; issue credit/debit notes as needed.

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FAQs

When exactly do the new rates apply?

From September 22, 2025, for goods and services (except tobacco/pan masala/cigarettes, which shift later on a separate notification).

Did residential 1%/5% rates change?

No. The 2019 scheme for residential projects (1% affordable; 5% other) with no ITC continues. The 80% procurement rule and RCM on shortfall still apply.

What about commercial apartments (non-RREP) at 12%?

As of this update, the Council’s press release does not explicitly revise that entry. Continue with 12% (with ITC) unless CBIC notifies otherwise.

Official Sources

Disclaimer: This is a practical cheat-sheet. Always verify your exact HSN/SAC and project conditions against the latest CBIC notifications and state circulars.