The price of building India: Why cement remains in the 28% GST slab

Cement contributes significantly to the government exchequer not just due to its high tax rate, but also because credit availment is blocked and restricted under the statute

The 31st meeting of the Goods and Services Tax (GST) Council, held in December 2018, deferred a decision to reduce the GST rate for cement from 28 per cent to 18 per cent. This was despite recognising that cement — along with automobile parts — remained among the few mass-consumption items still taxed at the highest slab, which was originally meant for luxury and sin goods.

 

Explaining the rationale behind the decision, then finance minister Arun Jaitley had said at the time that GST on cement generated a revenue of around ₹13,000 crore and auto parts around ₹20,000 crore. “So