HSN Codes and new GST rates for Cement Products
As part of the GST 2.0 reforms, the GST Council has reduced the tax rate on most cement products and cement-based structural components from 28% to 18%, with effect from 22 September 2025.
| HSN Code | Description | New GST Rate (%) (with effect from 22 September 2025) | Previous GST Rate (%) |
|---|
| 2523 | Portland cement, aluminous cement, slag cement, and similar hydraulic cements, whether coloured or in clinker form | 18% | 28% |
| 252321 | White Portland Cement, whether artificially coloured or not | 18% | 28% |
| 252329 | Other Portland Cement | 18% | 28% |
| 252330 | Aluminous Cement | 18% | 28% |
| 252390 | Other hydraulic cements | 18% | 28% |
| 382450 | Non-refractory mortars and concretes for building or civil engineering purposes (for example, ready-mix concrete) | 18% | 18% |
| 681011 | Building blocks and bricks of cement, concrete, or artificial stone | 18% | 28% |
| 681019 | Tiles, flagstones, bricks, and similar articles of cement, concrete, or artificial stone | 18% | 28% |
| 681091 | Prefabricated structural components for building or civil engineering of cement, concrete, or artificial stone | 18% | 28% |
| 681099 | Other articles of cement, concrete, or artificial stone | 18% | 28% |
This adjustment is intended to reduce the tax burden on construction materials while simplifying compliance under the revised GST framework.
Why HSN Codes are Assigned to Cement Products
HSN codes are assigned to cement products to simplify the process of trade by standardising the classification of goods. This not only helps in identifying the type of cement product but also aids in determining the applicable taxes, thereby making the global trade of cement products more efficient and less susceptible to errors.
Importance of HSN Code for Cement
- Regulatory Compliance: Helps businesses comply with both national and international trade regulations.
- Taxation: Supports correct tax classification and ensures adherence to the updated GST rates (effective September 22, 2025).
- Global Trade: Facilitates seamless import and export processes for cement products.
- Inventory Management: Simplifies inventory tracking and management for companies.
HSN Code for Cement: Classification
- Global Standardisation: HSN codes for cement are based on the Harmonised System, a global nomenclature developed by the World Customs Organisation, using a 6-digit code to classify goods for trade and customs purposes.
- Detailed Classification: Cement products are categorised under Chapter 25 as "Mineral Products," with further classification under heading 25.23 for various types of hydraulic cements, based on composition, use, and physical characteristics.
- Country-Specific Extensions: Countries can extend the standard 6-digit codes to 8 digits or more, allowing for more precise classification and the application of local taxation and trade policies, such as specific GST rates in India.
- Taxation Alignment: The HSN classification determines the applicable GST rate for each type of cement product, ensuring uniform taxation across different regions and facilitating compliance with local and international trade regulations.
The factors influencing the HSN classification for Cement are:
- Product Composition: The main components and chemical makeup of the cement product influence its classification.
- Use or Application: The intended use or specific application of the cement product can also determine its classification under the HSN codes.
- Physical Characteristics: Physical characteristics such as colour (e.g., white cement) and form (e.g., whether in clinkers or powdered form) play a role in the classification.
How to Find the HSN Code for Cement
To find the HSN code for cement, businesses can refer to the official GST portal, trade-related publications, or consult with a trade compliance expert. It is crucial to ensure the accuracy of the HSN code used to prevent any legal or financial discrepancies.
Compliance and Regulations
Ensuring the use of accurate HSN codes for cement is essential for compliance and to prevent penalties. The substantial reduction of the GST rate on cement to 18% represents a significant change, requiring businesses to promptly update all invoicing, accounting, and ERP systems to reflect the new tax structure, effective September 22, 2025.
Conclusion
Accurate application of HSN codes is vital for the cement industry. With the majority of cement products now subject to an 18% GST rate, effective from 22 September 2025, businesses must ensure that their classification and invoicing processes are updated without delay. To manage the costs of system upgrades and staff training required for smooth compliance under the revised GST framework, companies can consider financial support through a business loan EMI calculator to plan repayments efficiently. Additionally, it is important to check the prevailing business loan interest rate and confirm business loan eligibility before applying, ensuring timely access to the necessary funds from a business loan.
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