Red brick makers seek lower 5 pc GST, removal from Special Composition Scheme

New Delhi, Sep 24 (PTI) The red brick industry has urged the government to reduce GST rates to 5 per cent and remove the sector from the Special Composition Scheme.

Currently, red bricks under the Special Composition Scheme attract 6 per cent GST and 12 per cent with ITC. The threshold for GST levy is Rs 20 lakh turnover.

The new two-slab GST (Goods and Services Tax) structure of 5 per cent and 18 per cent has replaced the earlier four-rate duty regime following the GST Council's sweeping reform aimed at boosting consumption across the country. The new rates came into effect on September 22.

The GST Council did not recommend any change to the Special Composition Scheme rates for bricks, except for 'sand lime bricks', on which the rate has been reduced to 5 per cent from 12 per cent.

Hence, all kinds of bricks, except sand lime bricks, continue to attract 6 per cent GST and 12 per cent with ITC.

The brick industry is now demanding that they be removed from the Special Composition Scheme and brought in the 5 per cent slab.

"Lowering GST on bricks will improve affordability of the common man who plans to construct an individual house, and also of the developers of housing projects," Omvir Singh Bhati, General Secretary of the All India Brick and Tile Manufacturers Federation (AIBTMF), told PTI.

He said that just like cement, bricks are also a key component for any project, be it housing, hospitals, schools, hotels, etc. It accounts for around 10 per cent of the total cost of construction of such projects.

GST on cement has been reduced to 18 per cent from 28 per cent.

Bhati said higher GST on coal will increase input cost for the kiln industry, which employs around 3-4 crore people. The workers are paid as per market rates, which at times are more than the minimum wage criteria.

"We were facing a GST of 12 per cent. We were expecting a reduction in GST on bricks to the level of 5 per cent earlier. But in the GST council meeting, the government did not even consider our request. We have been put in a special composition scheme so the duty on bricks remains as it is (12 per cent)," he said. PTI ABI JD ABI BAL BAL