New GST on Sand in India: Natural Resources and Taxation
- The GST rate for natural, river, silica, quartz, and manufactured sand in India is 5%, while fly ash or crushed sand mix is taxed at 18%.
- Sand suppliers and construction businesses must register for GST if their turnover exceeds ₹40 lakhs and use HSN Code 2505 on invoices.
- Misclassification of sand types can lead to penalties, and it's crucial to differentiate between natural and processed sand for GST purposes.
- Mining royalties for sand extraction are subject to GST, and transport costs may incur additional GST charges.
- Businesses can claim Input Tax Credit (ITC) on sand used for business if proper invoices are maintained.
Sand is a critical raw material used in construction, plastering, and infrastructure development. With the implementation of the Goods and Services Tax (GST), sand suppliers, construction businesses, and buyers must understand how gst on sand is applied across different categories and uses.
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New GST Rate on Sand in India
The Government of India is updating GST rates effective after 22 Sep 2025. Sand is treated as a natural resource; rates below reflect the expected new GST rates (no compensation cess).
| Type of Sand | HSN Code | New GST Rate |
|---|---|---|
| Natural sand (excluding metal-bearing) | 2505 | 5% |
| River sand (unprocessed) | 2505 | 5% |
| Silica sand and quartz sand | 2505.10 | 5% |
| Manufactured sand (M-sand) | 2505 | 5% |
| Fly ash or crushed sand mix | 6815 | 18% |
Type of Sand
HSN Code
New GST Rate
Type of Sand
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New GST Rate
Type of Sand
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New GST Rate
Type of Sand
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New GST Rate
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Old GST Rate on Sand
(Old GST Rates – Applicable Until 21st September)
Under GST, sand is treated as a natural resource and its taxation depends on the type and usage.
| Type of Sand | HSN Code | Old GST Rate |
|---|---|---|
| Natural sand (excluding metal-bearing) | 2505 | 5% |
| River sand (unprocessed) | 2505 | 5% |
| Silica sand and quartz sand | 2505.10 | 5% |
| Manufactured sand (M-sand) | 2505 | 5% |
| Fly ash or crushed sand mix | 6815 | 18% |
Type of Sand
HSN Code
Old GST Rate
Type of Sand
HSN Code
Old GST Rate
Type of Sand
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Old GST Rate
Type of Sand
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Old GST Rate
GST on River Sand
River sand, which is naturally sourced and unprocessed, is taxed at a concessional rate.
- River sand GST rate: 5%
- HSN Code: 2505
- Applicable for sand used in construction, levelling, and landscaping
GST on M-Sand and Processed Sand
Manufactured sand (M-sand) is used as a substitute for river sand, especially where sand mining is restricted.
- M-sand GST Rate: 5%
- If mixed with cement, fly ash, or chemically processed: 18%
GST Compliance for Sand Suppliers
If you’re in the sand supply business:
- GST registration required if turnover exceeds ₹40 lakhs
- Use HSN Code 2505 on GST invoices
- File regular returns
- Mention transportation or royalty charges separately (which may attract additional GST)
- Input Tax Credit (ITC) is available on inputs used for sand extraction, transport vehicles, machinery maintenance, etc.
Challenges in Sand Taxation
- Mining Royalties: GST applies to mining rights and royalties paid to the government for extraction
- Transport GST: 5% or 12% based on transporter category
- Misclassification: Misreporting of processed sand as natural sand may lead to notices or penalties
Conclusion
Understanding the gst on sand helps suppliers, builders, and contractors manage project costs better and comply with tax rules. With sand being such a foundational material, knowing how it’s taxed is essential for smooth operations.
