HSN Code for Cement with GST Rate 2026: OPC, PPC & White Cement

The HSN code for cement is 2523. It covers Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Slag Cement (PSC), white cement, aluminous cement and cement clinker. Every type of cement under 2523 attracts 18% GST from 22 September 2025, under Schedule II, S. No. 9 of Notification 9/2025-Central Tax (Rate). Before that date, cement was taxed at 28%.

This page lists the eight-digit codes for each cement type, shows how the rate cut changed the cost of a bag, separates cement from cement products such as blocks, RMC and pipes, and explains the input tax credit rules that decide whether a builder, contractor or factory can recover the GST it pays on cement.

HSN codes for cement

Schedule II, S. No. 9 covers the whole heading: "Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic cements, whether or not coloured or in the form of clinkers". So the grade (33, 43 or 53), the brand, the bag size and whether it is OPC, PPC or PSC do not change the rate. The code changes; the rate does not.

Some websites and Google's AI answers still show 28% for cement, or "18% or 28%" for slag cement. That is out of date. No cement under 2523 is at 28% after 21 September 2025, and the 28% slab no longer exists for these goods.

OPC, PPC, PSC and white cement: what each is and where it is used

The code follows what the cement is made of, so it helps to know the types:

• Ordinary Portland Cement (OPC): clinker ground with a little gypsum. Sold in 33, 43 and 53 grades, the number being the strength in megapascals after 28 days. It gains strength fast, so it is used for slabs, beams, columns, precast work and anywhere formwork has to come off early.
• Portland Pozzolana Cement (PPC): clinker blended with fly ash or another pozzolana. It sets slower, releases less heat and resists water and chemicals better. Most bagged cement sold for houses in North India is PPC.
• Portland Slag Cement (PSC): clinker blended with granulated blast-furnace slag from steel plants. It has good resistance to sulphates and chlorides, so it is preferred near the sea, in sewage works and in marine structures. It is common in the East and South, near steel plants.
• White cement: made from raw materials low in iron, used for finishing, tile grouting, putty and decorative work. It costs several times more per kg, but the GST rate is the same 18%.
• Composite and special cements: sulphate-resisting, rapid-hardening and low-heat cements are all hydraulic cements of 2523 at 18%. High-alumina refractory cement for furnaces is 2523 90 20; refractory mortars and castables are a different heading, 3816.

Which HSN digits to print on a cement bill

• Turnover up to ₹5 crore last year: at least 4 digits (2523) on B2B invoices; optional on B2C.
• Above ₹5 crore: 6 digits (for example 2523 29 for OPC and PPC) on all invoices and e-invoices.
• Imports and exports: all 8 digits (2523 29 30 for PPC).

Cement moves in trucks, so almost every sale above ₹50,000 needs an e-way bill. The HSN on the e-way bill must match the invoice. A dealer who prints 2523 on the bill but 6810 on the e-way bill, or the other way round, invites a stop at a check-post.

GST rate on cement: 28% to 18%

From 1 July 2017 to 21 September 2025, cement was in the 28% slab. The GST Council's 56th meeting moved it to 18%, effective 22 September 2025. For a 50 kg bag, the effect looks like this:

That is ₹34 less tax per bag at the same base price. On a house that needs 400 bags, the saving is about ₹13,600. Actual retail prices also move with demand, freight and company pricing, so the shop price did not always fall by the full amount.

Within the state, 18% is charged as 9% CGST and 9% SGST. When cement is sold to a buyer in another state, the full 18% is IGST. Cement dealers near state borders get this wrong more often than anyone else.

Cement or cement product? Different codes

Once cement is turned into something else, it leaves heading 2523. These items are often sold by the same dealers, so they get mixed up on bills:

Two points that trip people up. First, cement bricks and concrete blocks (6810) are at 18%, while clay bricks and fly ash bricks are at 12% under the separate Notification 14/2025, which fixes central tax at 6% for them. Second, ready-mix concrete delivered and poured by the supplier at site is still a sale of RMC at 18%, but if the supplier also lays and finishes it as part of a contract, the whole job may be a works contract service.

Other construction materials at a glance

For anything not listed, search the material in the box above or in the HSN code finder.

Can you claim input tax credit on cement?

This decides the real cost of cement for a business far more than the rate itself. Section 17(5)(c) and (d) of the CGST Act block credit on goods and services used to construct immovable property on your own account, except plant and machinery.

The Supreme Court in Safari Retreats (October 2024) read "plant or machinery" in Section 17(5)(d) to allow a functionality test for buildings used for renting. The law was then amended with retrospective effect from 1 July 2017 to say "plant and machinery", which narrows that relief. Treat credit on cement for your own building as blocked unless a specific, documented reason says otherwise.

Cement in construction services

A contractor who supplies cement as part of building something charges GST on the whole contract, not separately on the cement. Under Notification 11/2017 as amended by 15/2025:

• Works contracts for commercial and private buildings: 18% with credit.
• Residential apartments by a promoter: 1% (affordable housing) or 5% (other residential) without credit.
• Specified government and public works contracts have concessional entries; check the exact entry for the project.

The cut in cement from 28% to 18% helped contractors on 18% contracts through lower blocked or carried credit, and helped builders on 1% and 5% schemes directly, since they cannot claim credit at all. For the service side, see our guide to SAC codes for construction services.

Freight, loading and other charges on cement

• Freight included in the bill: if the dealer delivers the cement and charges freight on the same invoice, the freight is part of the value of cement (Section 15) and taxed at 18%.
• Transport by a goods transport agency: when a GTA carries the cement and issues a consignment note, GST on the freight is either 5% under reverse charge paid by a registered recipient, or 18% (or 5% without credit) charged by a GTA that opts to pay itself.
• Loading and unloading charges: billed with the supply, they follow the cement at 18%.
• Bag deposit or empty bag return: treat as part of the supply unless genuinely refundable and shown separately.

Discounts, schemes and rate difference credit notes

Cement is sold through a long chain of company, depot, stockist and retailer, with discounts at every level. GST treats them differently depending on when and how they are given:

• Discount on the invoice: reduces the taxable value. GST is on the net price.
• Post-sale discount (quantity, target or cash discount): reduces the supplier's tax only if the discount was agreed before the sale, can be linked to the invoices, and the dealer reverses the matching credit. These are the conditions of Section 15(3)(b). Since late 2024, a supplier can rely on the dealer's credit reversal shown in its return, or on a certificate from the dealer, as explained in Circular 212/6/2024-GST.
• Financial credit note without GST: when those conditions are not met, the company can still give the discount as a commercial credit note. The dealer keeps its full credit, and the supplier's tax does not reduce.
• Scheme gifts to dealers (gold coins, trips): if given free and not tied to a contract, the company must reverse credit on them under Section 17(5)(h). If they are earned under a written target scheme, they may be part of the supply; this depends on the scheme terms.

Getting this right matters because a cement dealer's annual post-sale discounts can run into lakhs of rupees, and a mismatch between the company's credit notes and the dealer's reversal is a common audit point.

Damaged, set and returned cement

Cement loses strength with time and moisture. Bags that set hard in a godown during the monsoon are a real loss for dealers, and they have a GST effect:

• Written off or destroyed: credit taken on cement that is lost, destroyed or written off must be reversed under Section 17(5)(h). Keep a stock register entry, photographs and the write-off approval as evidence.
• Sold cheaply as damaged stock: if the dealer sells set or damaged bags at a reduced price, it is still a sale of cement at 18% on the price charged, and the credit stays.
• Returned to the company: the company issues a credit note within the Section 34 time limit, reduces its tax, and the dealer reverses the matching credit.
• Burst bags in transit: a transit loss recovered from the transporter or insurer is not a supply of cement, but the credit on the lost quantity must be reversed.

The practical habit is to check the packing date printed on each bag when stock arrives, sell old stock first, and record losses in the month they happen rather than at year end.

Composition scheme for small cement retailers

A small cement and hardware shop with turnover up to ₹1.5 crore can opt for the composition scheme and pay 1% of turnover. It cannot claim credit, cannot charge GST to customers and cannot sell to other states. Most cement retailers who supply contractors and builders stay in the regular scheme, because their buyers want a tax invoice to claim the 18% as credit. For a shop selling mainly to individuals building houses, composition can reduce the effective tax, but the 18% paid on purchases becomes a cost.

Worked example: a dealer's invoice

A cement dealer in Ghaziabad sells to a contractor in Noida (both in Uttar Pradesh, so CGST and SGST):

The bill is ₹83,780, above ₹50,000, so an e-way bill is needed. If the same truck went to a site in Haryana, the tax would be IGST of ₹12,780 instead.

Exporting and importing cement

India exports cement and clinker to neighbouring countries, mostly by road to Nepal and Bangladesh and by sea to the Gulf and Africa. Exports are zero-rated: under a Letter of Undertaking without IGST, with a refund of unused credit, or with IGST paid and refunded. The eight-digit code on the shipping bill must match the invoice. Imports of cement and clinker pay basic customs duty and IGST of 18% on the value plus duty, and the importer can claim the IGST as credit.

Common mistakes with GST on cement

Old 28% rate still in the billing software

Any cement invoice at 28% after 21 September 2025 collects excess tax. Section 76 makes you deposit the excess, and correcting each buyer's invoice takes credit notes.

Cement blocks billed as cement

Blocks, bricks and pavers are 6810, not 2523. The rate happens to match, but clay and fly ash bricks do not: they are at 12%.

Credit claimed on cement for own building

This is the most common reason for demand notices on cement. The credit is blocked under Section 17(5)(d), and claiming it brings interest under Section 50 and a penalty.

CGST and SGST on a sale to another state

A dealer near a state border selling to a site across the border must charge IGST. Paying the wrong tax means paying again and claiming a refund.

Site in one state, bill to another GSTIN

For multi-state contractors, a purchase billed to the wrong registration puts the credit where it cannot be used. Bill each site's purchases to that state's GSTIN.

GST registration for cement dealers

A cement dealer must register once turnover crosses ₹40 lakh a year (₹20 lakh in some special category states), and much earlier in practice because almost any dealer sells to buyers who want a tax invoice for credit. Selling to another state needs registration from the first sale. Our GST registration service handles the application, and our tax consultants help contractors and dealers with multi-state registrations, credit and returns. Check other materials in the GST rate finder.

Official sources: CBIC rate notifications (Notification 9/2025-Central Tax (Rate), Schedule II, S. No. 9; Notification 14/2025-Central Tax (Rate) for bricks) · GST portal: Search HSN Code.