The Government of India has imposed the GST, which is the acronym for the Goods and Service Tax, in all sectors. The tax has come into force from 1 July 2017 and it is projected to make wonders by decreasing the overlying tax burden in the country. This tax creates a huge impact on the cost of a variety of building materials, including cement, bricks, steel, and paints, which ranges from 5% to 28%.
As far as cement is concerned, it will attract a GST of 28%, causing increased expenses for the building sector. Next to China, the cement industry in India is considered the second major sector in the world. The main idea of imposing the GST on cement is that the Indian Government wants to focus highly on expanding infrastructure, inexpensive roads, and housing. This may offer a significant boost in the cement industry in due course. However, the main sufferer is the public, who have to pay the extra cost for their cement needs to build their homes.
Iron and steel play a vital role in meeting the necessities of the Indian construction industry. They are also extensively used by the manufacturing companies to produce machine parts. However, when considering the cost of kitchen utensils, it will be slightly cheaper than before. This is for the recent that the current GST on these items will be 12% when compared to existing tax of 19.5%. However, Barbecue items, faucets, taps, etc., will be a little bit costlier, as they are charged with the GST of 28%, which is far higher than the existing tax rate. Railways sector will neither be affected nor benefitted by the GST, as there is no considerable tax burden on this industry. Moreover, the steel industry is possible to enjoy by the 5% GST benefit on the key inputs, such as iron ore and coal, used by them.
Bricks used as construction materials attract diverse GST rates that range from 5% to 28%. Each category of brick will attract different GST rate. This means that there will be a considerable increase in the cost of bricks based on their dissimilar HSN codes derived from their type.
The major beneficiary of the introduction of GST is the paint industry. This is for the reason that the imposition of GST on paint products will not affect the sector much, even if they are charged with the highest rate of 28% GST when compared to the existing tax rate. This means that when comes to paint business it is a no loss and no gain condition.
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