Cement now attracts 18% GST under HSN code 2523 — the rate was cut from 28% with effect from 22 September 2025. This guide gives the CGST/SGST/IGST split, the HSN sub-codes, what the cut means per bag, and when builders, contractors and home-owners can or cann…
Cement is taxed at 18% GST from 22 September 2025. Before that it was in the 28% slab, alongside luxury goods, for eight years. The cut came with the GST Council's rate rationalisation of September 2025.
| Sale | Tax charged |
|---|---|
| Within the same state | 9% CGST + 9% SGST |
| To another state | 18% IGST |
There is no compensation cess on cement, so 18% is the full GST.
All cement falls under HSN 2523, and the whole heading moved to 18%:
| HSN | Covers | GST |
|---|---|---|
2523 10 | Cement clinkers | 18% |
2523 21 | White cement | 18% |
2523 29 | Other Portland cement (OPC 43/53 grade) | 18% |
2523 30 | Aluminous cement | 18% |
2523 90 | Other hydraulic cements, including PPC and slag cement | 18% |
On invoices, businesses with turnover up to ₹5 crore must show at least the 4-digit code (2523). Larger businesses must show 6 digits.
Take a 50 kg bag priced at ₹350 before tax:
That is ₹35 less tax per bag. For a house that uses 400 bags, the tax saving is about ₹14,000, if the full cut is passed on in the price. Shop prices depend on the brand and the dealer, so compare the pre-tax rate on the bill, not just the total.
| Buyer | Input tax credit? |
|---|---|
| Individual building their own house | No. Not registered, and no output tax to set it against. |
| Business constructing its own office, shop or factory building | No. Blocked by section 17(5)(d) for construction of immovable property on own account. |
| Works contractor building for a client and charging GST | Yes, against the GST charged on the contract |
| Cement dealer or trader | Yes, against GST on sales |
| Developer of residential flats paying 1% or 5% without ITC | No. These concessional rates come without credit. |
Developers paying the concessional 1% (affordable housing) or 5% rate on residential flats must buy at least 80% of their inputs from registered suppliers. Cement has a stricter rule of its own: any cement bought from an unregistered supplier attracts GST under reverse charge, payable by the developer at the cement rate, now 18%.
Builders, contractors and cement dealers can hand their monthly returns and ITC reconciliation to TaxQue's GST return filing team. If a notice has already arrived over old 28% invoices or ITC claims, see GST notice resolution.
This article is published by TaxQue (ARB FinTech LLP) for general informational, educational, and business guidance purposes only. Tax laws, GST rules, MCA circulars, and judicial precedents are subject to frequent statutory revisions. This content does not constitute formal individualized tax, accounting, or legal counsel.
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