GST on Fly Ash Bricks – Classification, Rate, ITC and Other
Clarifications (AAR Tamil Nadu – M/s SRS Industries) (Advance Ruling No. 34/ARA/2025,
dated 01.09.2025)
Introduction: M/s
SRS Industries, a manufacturer of fly ash bricks and cement bricks in Chennai,
approached the Tamil Nadu Authority for Advance Ruling seeking clarity on
various GST issues. The business manufactures fly ash bricks using fly ash,
quarry dust and cement. Since customers were quoting different GST rates based
on court decisions, the applicant wanted an authoritative clarification on GST
classification, rate, ITC availability, RCM applicability, exemption
possibilities, and eligibility for the composition scheme.
The Authority examined
all the questions in detail and issued a clear ruling on 1 September 2025. The
ruling is helpful for all manufacturers and traders of fly ash bricks because
it brings clarity after several amendments in the GST rate structure.
Classification
of Fly Ash Bricks
The AAR clarified that
fly ash bricks fall under HSN 6815 99 10. This is the standard
classification for all types of fly ash bricks.
The ruling also explains
that, from 18 July 2022, the Government removed the condition relating to
percentage of fly ash content. Therefore, the GST rate no longer depends on
whether the brick contains 51% fly ash, 90% fly ash, or any other percentage.
GST Rate
Applicable
The AAR held that fly ash
bricks attract 12% GST (6% CGST + 6% SGST) under the normal rate when
the manufacturer avails Input Tax Credit (ITC).
However, the Government
also offers a concessional rate of 6% GST (3% + 3%) under Notification
No. 2/2022-CT(R) dated 31.03.2022. This lower rate is available only when
the manufacturer does NOT claim ITC and reverses proportionate ITC as per
Section 17(2).
During the hearing, SRS
Industries confirmed that they claim ITC on raw materials such as fly ash,
quarry dust, and cement. Therefore, they cannot use the concessional 6% rate
and must pay 12% GST.
No
Exemption or Special GST Rate
The applicant wanted to
know whether fly ash bricks made with more than 51% fly ash are eligible for
any exemption or lower GST because they use recycled materials.
The AAR clearly stated
that no exemption exists under GST for fly ash bricks. They are also not
eligible for any special or concessional rate simply because the bricks are
environment-friendly or sustainable.
All fly ash bricks
attract GST as per the applicable rate, which is either 12% (with ITC) or 6%
(without ITC). There is no 5% rate and no special rate for higher fly ash
content.
Input Tax
Credit (ITC) on Raw Materials
The Authority confirmed
that manufacturers of fly ash bricks can claim ITC on raw materials and
input services only if they pay 12% GST on their outward supply.
If they choose the
concessional 6% GST rate, then no ITC can be claimed, and already
availed ITC has to be reversed.
Since SRS Industries is
availing ITC, they must continue paying GST at 12%.
GST
Treatment: Normal Charge or RCM
A common doubt was
whether sale of fly ash bricks is covered under Reverse Charge Mechanism (RCM).
The AAR clarified that
fly ash bricks are not covered under Section 9(3) for reverse charge.
The applicant is also not a promoter or notified person under Section
9(4). Therefore, the supply of fly ash bricks is taxed under normal forward
charge, and the supplier must pay GST in the regular manner.
Supply to
Government or PSU
The applicant also asked
whether fly ash bricks attract a reduced rate when sold to Government or Public
Sector Undertakings.
The AAR clarified that there
is no special exemption or reduced GST rate for supplies to Government
departments or PSUs. GST rate remains the same, whether supplied to a private
developer, contractor, builder, Government authority, or PSU.
Eligibility
for Composition Scheme
Under the GST composition
scheme, certain manufacturers are barred from opting in. After amendments made
in 2022, manufacturers of fly ash bricks, fly ash aggregates, and fly ash
blocks are not eligible for the composition scheme.
Therefore, SRS Industries
cannot opt for GST composition even if their turnover is below the threshold.
GST on Fly
Ash as Raw Material
One of the questions
related to the GST rate on fly ash purchased as a raw material. The Authority
explained that such a question is outside the scope of Advance Ruling,
because AAR can only give rulings on supplies made by the applicant, not
on supplies to the applicant.
Final
Simple Takeaway
In summary, the Tamil
Nadu AAR clarified the following important points for fly ash brick
manufacturers:
- Fly ash bricks fall under HSN 6815
99 10.
- GST rate is 12% with ITC.
- A concessional 6% rate is
available only without ITC.
- No exemption or special rate applies,
even for Government or PSU supplies.
- Supply of fly ash bricks is under normal
GST, not RCM.
- Manufacturers of fly ash bricks cannot
opt for the composition scheme.
- GST on raw materials received by the
applicant is outside AAR scope.
This ruling brings
complete clarity for all businesses engaged in manufacturing or selling fly ash
bricks, especially after the 2022 amendments.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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