GST on Supply of Bricks Increased From 5% to 12%
The GST Council has agreed to raise GST on supply of bricks to 12% from 5% with input tax credit (ITC) from April 2022. "Brick kilns would be brought under a special composition scheme with a threshold limit of Rs 20 lakh, with effect from April 1, 2022. Bricks would attract GST at the rate of 6% without input tax credit under the scheme. GST rate of 12% with ITC would otherwise apply to bricks," it said. “While increasing the GST rate on bricks from 5% to 12% appears to be a positive move for manufacturers and traders of bricks as it takes care of the inverted duty structure. It may increase the cost of the flat (finished product) in the hands of the end-user or buyers as the developer may not be able to take complete credit of the same,” Harpreet Singh, partner, Indirect Taxes, KPMG India. As for the GST on brick kiln owners, capacity-based taxation may not be the right thing to do, especially during COVID-19 times as brick kiln owners may not be producing at the optimum level right now on account of various constraints pertaining to the pandemic, say some taxation experts.