Cement GST rate in 2026
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.
HSN code for cement
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.
What the cut means per bag
Take a 50 kg bag priced at ₹350 before tax:
- At 28%: ₹98 GST, so ₹448 a bag.
- At 18%: ₹63 GST, so ₹413 a bag.
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.
Can you claim the GST paid on cement?
| 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. |
A special rule for residential developers
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.
