HSN Code For Construction Work: All You Need To Know
HSN Code For Construction Work: All You Need To Know
By Charu Gupta Published: May 12th, 2025
Whether you’re a contractor, builder, architect, or business owner in the construction industry, understanding the HSN code for construction work and SAC (Service Accounting Code) classifications is critical for seamless GST compliance. With dozens of materials, quick billing processes, and service types involved, even minor misclassifications can lead to penalties and tax errors.
This guide breaks it all down for you, without confusion, just clear, accurate information tailored to what you’re searching for.
What is the HSN Code and Why Does it Matter in Construction Work?
HSN codes are globally recognized codes used to classify goods for taxation purposes, while SAC codes are used to classify services under GST in India.
In the construction sector:
- Goods like cement, bricks, tiles, and rods are classified using HSN codes.
- Services like residential, commercial, and infrastructure construction use SAC codes.
Using the correct codes is legally mandatory and ensures:
- Accurate GST rate application
- Correct invoice generation
- Ease in GST returns and audits
HSN Code for Construction Work (With GST rates)
Here’s a simplified table of essential construction materials and their GST classification:
| Material | HSN Code | GST Rate |
| Ordinary Portland Cement | 2523 | 28% |
| Steel rods and bars | 7214 | 18% |
| Sand (natural & crushed) | 2505 | 5% |
| Bricks (non-refractory) | 6901 | 5% |
| Marble & Granite (raw) | 2515 | 12% |
| Electrical switches/wires | 8536 | 18% |
| Plastic pipes & fittings | 3917 | 18% |
| Tiles (ceramic or vitrified) | 6907 | 28% |
SAC Codes for Construction Services
Unlike materials, construction services are classified under the SAC code 9954 with subcategories to reflect the specific type of service.
| SAC Code | Service Description | GST Rate |
| 995411 | Construction of individual houses, residential buildings | 18% |
| 995412 | Hostels, dormitories, housing societies | 18% |
| 995413 | Industrial complexes and plants | 18% |
| 995414 | Commercial buildings (shops, malls, offices) | 18% |
| 995421 | Roads, highways, bridges, tunnels | 5% or 12% |
| 995419 | Repairs, renovations, and restoration of any structure | 18% |
GST Rates for Construction Work in India
GST rates for construction work depend on project type, nature of service, and availability of ITC (Input Tax Credit):
| Project Type | GST Rate | ITC |
| Affordable housing (under scheme) | 1% | No |
| Other residential construction | 5% | No |
| Commercial construction | 12% | Yes |
| Government infrastructure works | 12% | Yes |
| General works contract services | 18% | Yes |
What are the Common Mistakes to Avoid?
Using incorrect codes: Many SMEs apply the same HSN code for construction work across different types of materials.
Ignoring SAC sub-categories: Not all construction services fall under one umbrella.
Mismatched GST rate & invoice: This can trigger scrutiny during filing or audit.
Not updating changes: GST council updates rates and classifications periodically.
FAQ’s
1. What is the HSN code for construction services under GST?
Services are classified using SAC codes, not HSN. The SAC code for construction services is 9954, with sub-codes for residential, commercial, industrial, and infrastructure projects.
2. Are construction materials taxed differently than construction services?
Yes. Materials like cement, steel, and tiles are taxed using HSN codes at 5% to 28%, while services like building construction are taxed using SAC codes at 5%, 12%, or 18%, depending on the project type.
3. Can a builder claim Input Tax Credit (ITC) on construction materials?
ITC is allowed only in certain scenarios, such as when the construction is for further supply (not for self-use) or in commercial projects where GST is charged at 12% with ITC.
4. What is the SAC code for renovation and repair services in construction?
The SAC code is 995419. It covers activities like structural alterations, repairs, and refurbishment of existing buildings, and it attracts 18% GST.
5. Do government construction contracts have different GST rules?
Yes, government-related construction contracts often attract 12% GST with ITC, but special exemptions or lower rates may apply depending on the scheme or department involved.
6. Is it compulsory to mention HSN code for construction work on invoices?
Yes. For businesses with turnover exceeding ₹5 crore, HSN/SAC codes must be mentioned on B2B invoices. For others, 4-digit or 6-digit codes may suffice depending on the turnover threshold.
7. Where can I find the most up-to-date list of HSN and SAC codes?
The official GST portal (https://www.gst.gov.in) regularly updates the list of HSN and SAC codes. You can also refer to CBIC circulars or consult a certified GST practitioner.
Conclusion
Navigating GST in the construction industry can seem complex—but once you understand why HSN code for construction work and SAC codes are important , everything becomes clearer. Whether you’re dealing with raw materials like steel and cement or offering services like residential construction, the right classification ensures accurate and quick billing, seamless GST returns, and fewer compliance issues.
From affordable housing projects to highway construction and renovation services, each activity under construction has a distinct GST rate and code. By staying updated, you not only save time and avoid penalties but also strengthen your business’s credibility with clients and the tax authorities.
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