--- title: "New GST for Cement 2026: 18% Rate on Cement Bags & All Cement" description: "New GST rate on cement in 2026 is 18% on cement bags, OPC, PPC and blended cement products. Let Busy handle GST billing accurately on every transaction." canonical: "https://busy.in/gst-rates/cement/" author: "Nitin Bansal" published: "2025-04-22T12:24:16.000Z" category: "GST Rates" --- - GST on cement in India was reduced from **28% to 18%** effective **September 22, 2025**. - Cement, including types like OPC and PPC, falls under HSN code 2523 and is now taxed at 18%. - The high GST rate on cement increases construction costs, impacting projects like affordable housing and infrastructure. - Businesses can claim Input Tax Credit (ITC) on cement used for business purposes but not for personal construction projects. - Before GST, cement was taxed under multiple heads with a total effective tax rate of 25–27%, now replaced by a flat GST rate. # New GST on Cement in India: Tax Rate and Its Impact on Construction Costs Cement is a key ingredient in construction, whether you’re building a home, a commercial complex, or infrastructure. With the implementation of the Goods and Services Tax (GST), the tax structure for cement has been streamlined, but it remains one of the highest-taxed items. In this blog, we’ll break down the cement gst rate, relevant HSN codes, how it affects pricing, and what it means for real estate and infrastructure projects. ## **New GST Rate on Cement in India** The **cement GST rate in India** is **18%** under the revised GST structure effective from **22 September 2025.** Cement and clinker under HSN 2523 attract 18% GST, replacing the earlier 28% rate. ## GST Rate on Cement and Clinker | Type of Cement | New GST Rate (After 22 Sep 2025) | Old GST Rate (Before 22 Sep 2025) | Remarks | | --- | --- | --- | --- | | OPC | 18% | 28% | Standard slab after revision | | PPC | 18% | 28% | Standard slab after revision | | White Cement | 18% | 28% | Covered under HSN 2523 | | Cement Clinker | 18% | 28% | Same heading family under 2523 | | Hydraulic Cement other than Portland | 18% | 28% | Covered under HSN 2523 | ## HSN Code for Cement Cement and cement clinker are covered under **HSN 2523**, which includes Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic cements, whether or not coloured or in the form of clinkers. | Product Description | HSN Code | | --- | --- | | Portland Cement, including white cement | 2523 | | Cement Clinker | 2523 | | Hydraulic Cement | 2523 | ## **GST Impact on Real Estate and Infrastructure** Earlier, 28% GST on cement increased construction costs for builders, contractors, and infrastructure projects. With the rate cut to **18%**, cement becomes a less tax heavy input, which can reduce pressure on project budgets, contractor pricing, and overall construction costs. **Get a Free Trial –** [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/) Live Demo Available Today ## Audit GST Documents Before Errors Turn Into Notices Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## **How to Calculate GST on Cement** GST on cement is calculated on the taxable value of the goods at the applicable GST rate. GST Amount = Taxable Value × GST Rate Final Invoice Value = Taxable Value + GST Amount ### **Example 1: GST on Cement Bag Purchase After 22 Sep 2025** Suppose the taxable value of cement is Rs 10,000. GST = 10,000 × 18% = Rs 1,800 Final Invoice Value = 10,000 + 1,800 = Rs 11,800 ### Example 2: Cement clinker purchase after 22 Sep 2025 Suppose the taxable value of clinker is Rs 50,000. GST = 50,000 × 18% = Rs 9,000 Final Invoice Value = 50,000 + 9,000 = Rs 59,000 ## **Input Tax Credit (ITC) on Cement** Businesses registered under GST can [**claim ITC**](https://busy.in/gst/complete-guide-to-input-tax-credit-under-gst-in-india/) on the GST paid on cement if: - The cement is used for business purposes (e.g., construction of a factory) - A proper tax invoice is available - The supplier has filed returns However, **ITC is restricted** if the cement is used for constructing an immovable property (e.g., a building for self-use), as per [**Section 17(5) of the CGST Act**](https://busy.in/gst/input-tax-credit/) . **Explore a Free Demo of –** [**Best Inventory Management Software For Small Business**](https://busy.in/accounting-software/inventory-management/) ## **Unique Features of BUSY Accounting Software for the Cement Industry** - Batch-wise [**inventory management**](https://busy.in/accounting-software/inventory-management/) for different grades of cement. - Real-time Shelf-life tracking across multiple godowns and depots. - Customisable rate lists for wholesale, retail, and project-based pricing. - Vehicle and transportation tracking integrated with sales invoices. - Multi-unit stock handling (bags, tons, kgs) with unit conversion. - Automated challan and [**invoice generation for bulk orders**](https://busy.in/gst/how-to-generate-e-invoices-in-bulk/) . - Approval workflow for dispatch orders and pricing overrides. - Loading and unloading expense tracking at each transaction level. - Centralised reporting for stock movement and sales analysis. **Get a Free Trial –** [**Best E Way Bill Software**](https://busy.in/accounting-software/auto-e-way-bill/) ## **Final Thoughts** Cement continues to be one of the highest-taxed items under GST, which adds significantly to construction and infrastructure costs. For real estate developers, understanding how GST and ITC apply to cement can help manage project finances. For individual buyers or small contractors, it’s important to factor in GST while planning budgets. ## About the author **Nitin Bansal** I am a Fellow Chartered Accountant (FCA) and LLB graduate with 10 years of experience in corporate auditing, taxation, and financial consulting. My expertise includes corporate audits, income tax planning, HSN code classification, and GST rate advisory. Through my blogs and articles, I aim to simplify corporate taxation, auditing, and GST compliance, making financial matters more accessible for professionals and business owners. ## Frequently asked questions ### What is the current GST rate on cement? The **GST rate on cement** is 18% under the revised rate structure effective from 22 Sep 2025. ### Can builders claim ITC on cement? Generally, ITC can be claimed when cement is used for taxable business supplies, but eligibility depends on the nature of the project and the applicable GST restrictions. ### Why is cement taxed so high? This needs updating. Cement was earlier taxed at 28%, but it has now been reduced to 18% GST. ### Is GST applicable on cement transportation too? Yes. Transportation is taxed separately as a service, and the applicable rate depends on the transport service structure. ### Has the GST rate on cement changed since 2017? Yes. Cement remained at 28% for a long period, but from 22 Sep 2025 the revised rate is 18%. ## Related articles - [New GST on Skincare Products: Rate, Branding & Retail Pricing](https://busy.in/gst-rates/skincare-products/) - [New GST on Industrial Machinery: Slabs, ITC & MSME Effect](https://busy.in/gst-rates/industrial-machinery/) - [New GST on Restaurant Meals: Dine-in, Takeaway & Delivery Compared](https://busy.in/gst-rates/restaurant-meals/) - [New GST on Kitchen Utensils: What’s Taxed and What’s Not?](https://busy.in/gst-rates/kitchen-utensils/) - [New GST on Online Education: Rate, Exemptions & EdTech Impact](https://busy.in/gst-rates/online-education/) - [New GST on Packaging Materials: Tax Implication Across Industries](https://busy.in/gst-rates/packaging-materials/) - [New GST on Digital Marketing Services: Tax Rates & Input Credit Explained](https://busy.in/gst-rates/digital-marketing-services/) - [New GST on Pesticides: Rates, Agri-Exemptions & Sector Impact](https://busy.in/gst-rates/pesticides/) - [New GST on Butter: From Dairy to Dining – What You Pay](https://busy.in/gst-rates/butter/) - [GST on Honey: Rate, Applicability & Industry Outlook](https://busy.in/gst-rates/honey/)