Reporting 6% rate in GSTR-1

A new tax rate of 6% IGST or 3% CGST+ 3% SGST has been introduced on Fly ash bricks or fly ash aggregate with 90 percent, Bricks of fossil meals or similar siliceous earth, Building bricks, etc vide Notification dated 31st March 2022. Now, the Goods and Services Tax Network (“GSTN”) vide an Advisory dated May 10, 2022, announced that Changes are being made on the GST portal for Reporting a 6% rate in GSTR-1.

New GST Rate of 6% for Brick Manufacturing Sector

As mentioned above, The Central Board of Indirect Taxes and Customs (CBIC) has issued a New GST Rate of 6% for Brick manufacturing vide the notifications dated 31st March 2022. The 6% rate structure implemented by the Government is an outcome of the recommendations of the 45th GST Council meeting.

Under the new tax rates structure, the Government has notified a higher rate of GST which is 12% on the specified products, where the benefit of claiming ITC would be available to the supplier.
Alternatively, the specified products can be supplied with the lower GST rate of 6% with a condition that the benefit of ITC would not be available in respect of goods or services used (exclusive or common) in supplying such goods.
The suppliers of the specified products would no longer be able to avail of the benefit of the composition scheme under Section 10 of the CGST Act.
The threshold limit of registration for such suppliers has also been decreased from Rs. 40 lakhs to Rs. 20 lakhs. In other words, the supplier of specified products would be required to register as a normal taxpayer under the GST law if their aggregate turnover in the financial year exceeds Rs. 20 lakhs.

Applicability of Revised GST Rate

GST on certain varieties of bricks has been hiked from 5% to 12% from 1st April 2022 and norms related to input tax credit have also been changed. As mentioned above, the Government has notified a revised tax structure for the Brick Kilns sector. In this new tax structure, the Government has provided the GST rate of 12% (with ITC) or 6% (without ITC) for the below products:

S. No.	Tariff item	Description
1.	6815	Fly ash bricks of fly ash aggregate with 90 percent. or more fly ash content; Fly ash blocks
2.	6901 00 10	Bricks of fossil meals or similar siliceous earth
3.	6904 10 00	Building bricks
4.	6905 10 00	Earthen or roofing tiles

All brick manufacturers with a turnover above Rs.20 lakh are required to be registered and pay GST at the above rates. Earlier, the limit was Rs 40 lakh.

Procedure to report 6% in GSTR-1

The GSTN advisory dated 10th May 2022 has announced that, as a temporary measure, taxpayers who have to report goods at a 6% rate may do so by reporting the entries in the 5% heading and then manually increasing the system computed tax amount to 6%. This can be done by entering the value in the ‘Taxable value’ column next to 5% tax-rate and then increasing the system computed tax-amount to 6% IGST or 3% CGST + 3% SGST in the ‘Amount of Tax’ column under the relevant Table, namely B2B, B2C or Export, as applicable. This will ensure that the correct tax amount is reported in GSTR-1. Note: GSTN also announced that a 6% GST rate will be made available on the GST portal shortly. Guide to GSTR-1 Filing

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Frequently Asked Questions

Common questions about 6% GST Rate Reporting Guide for Brick Manufacturing Sector.

The new GST rate for the brick manufacturing sector is 6% (without input tax credit) or 12% (with input tax credit). This revised rate structure has been implemented by the government based on recommendations from the 45th GST Council meeting.

The new GST rate of 6% (without ITC) or 12% (with ITC) is applicable for fly ash bricks or fly ash aggregate with 90% or more fly ash content, bricks of fossil meals or similar siliceous earth, building bricks, and earthen or roofing tiles.

As a temporary measure, taxpayers reporting goods at 6% rate can do so by entering the taxable value under the 5% rate heading and then manually increasing the system computed tax amount to 6% IGST or 3% CGST + 3% SGST in the 'Amount of Tax' column.

Yes, the threshold limit of registration for brick manufacturers has been decreased from Rs. 40 lakhs to Rs. 20 lakhs. Brick manufacturers with a turnover exceeding Rs. 20 lakhs are required to register and pay GST at the revised rates.

No, suppliers of the specified products, including brick manufacturers, would no longer be able to avail the benefit of the composition scheme under Section 10 of the CGST Act.

The revised GST rate structure for the brick manufacturing sector came into effect from 1st April 2022, as notified by the Central Board of Indirect Taxes and Customs (CBIC) vide notifications dated 31st March 2022.

Yes, the GSTN has announced that the 6% GST rate option will be made available on the GST portal shortly. The current procedure of manually increasing the tax amount is a temporary measure.

The revised GST rate structure provides brick manufacturers with the option to choose between a higher rate of 12% with input tax credit or a lower rate of 6% without input tax credit, allowing them to optimize their tax liability based on their business model and operational requirements.

No, the revised GST rate structure is not limited to brick manufacturers. It applies to suppliers of the specified products, which include fly ash bricks, bricks of fossil meals, building bricks, and earthen or roofing tiles.

You can refer to the notifications issued by the Central Board of Indirect Taxes and Customs (CBIC) dated 31st March 2022, the recommendations of the 45th GST Council meeting, and the advisory issued by the Goods and Services Tax Network (GSTN) dated 10th May 2022 for more detailed information.