Building materials industry is the major gainer of GST reduction

Building materials industry is the major gainer of GST reduction

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In the meeting held on Friday, the GST Council has recommended major relief in GST rates on certain goods and services. These recommendations spread across many sectors and commodities. As per these recommendations, the list of 28% GST rated goods is recommended to be pruned substantially, from 224 tariff headings to only 50 tariff headings. Further, the Council has recommended changes in GST rates on a number of goods, so as to rationalize the rate structure with a view to minimize classification disputes.

Plywood manufacturers hit the roads demanding rate reduction

Plywood manufacturers hit the roads demanding rate reduction
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Plywood manufacturers hit the roads demanding rate reduction

Building materials and home improvement sectors are the major beneficiaries of this rate reduction as the prices of several products like plywood, tiles, furniture, mattress, switches, doors and windows, etc. will be affected favorably by this decision of the government. There was a strong demand from various associations for rate revision. Some of them like plywood manufacturers had hit the roads demanding rate reduction. Some of the items where GST has been reduced from 28% to 18% are:

  • Wire, cables, insulated conductors, electrical insulators, electrical plugs, switches, sockets, fuses, relays, electrical connectors
  • Electrical boards, panels, consoles, cabinets etc. for electric control or distribution
  • Particle/fibre boards and ply wood. Article of wood, wooden frame, paving block
  • Furniture, mattress, bedding and similar furnishing
  • Lamp and light fitting
  • Sanitary ware and parts thereof of all kind
  • Articles of plastic, floor covering, baths, shower, sinks, washbasins, seats, sanitary ware of plastic
  • Slabs of marbles and granite
  • Goods of marble and granite such as tiles
  • Ceramic tiles of all kinds
  • Door, windows and frames of aluminum
  • Articles of cement or concrete or stone and artificial stone
  • Ceramic flooring blocks, pipes, conduit, pipe fitting
  • Wall paper and wall covering
  • Glass of all kinds and articles thereof such as mirror, safety glass, sheets, glassware
  • Escalators
  • Artificial flowers, foliage and artificial fruits

Earlier doors and windows made of uPVC enjoyed 18% GST while aluminum doors and windows attracted higher GST at 28%. With the current rate reduction for aluminum doors and windows a level playing field has been created. It is interesting to note that while GST on wallpaper and wall covering has been brought down to 18%, GST on paint has been maintained at 28%. May be the government wants to encourage people t go for wallpapers than wall painting! GST on another important building material, that is, cement has been maintained at 28%. When lot of noise is being made about affordable housing a GST reduction on cement would have been appropriate and would have sent right signals.