GST Rates & HSN Code for Setts and Curbstones (HSN 6801)

The construction and infrastructure sector acts as a vital component of any growing economy. For instance, in India, the implementation of the GST charged the way construction materials are taxed; providing a uniform and transparent system for taxing all types of materials in one location. Setts, curbstones and flag stones are three different types of natural stone commonly found within the field of civil engineering and are essential elements involved in urban development, road safety and landscaping. Knowing the correct HSN code for each of these products, as well as their respective GST rates, is not only a legal obligation, but also represents an opportunity for your business to gain competitive advantage by maintaining accurate records and performing operations correctly.

Defining the Products: Setts and Curbstones

Before considering any of the tax technicalities with GST taxation on setts or curbstones or flagstones under HSN 6801; we first must look at what these classified as products fall within the context of this law. All natural stones used for heavy construction purposes as classified under HSN 6801 are specifically defined as “stone products” according to this law.

A. Setts

Setts are defined as blocks of natural stone, usually rectangular or square in shape. They are commonly used for:

Paving historical streets and walkways.
Heavy-traffic driveways where durability is a priority.
Decorative landscaping in public parks and squares

B. Curbstones

Curbstones are rectangular stone slabs that can be placed on their side or their end at the perimeter of the road or driveway or median:

Structural Support: Holding the road pavement in place.
Safety: Defining the boundary between vehicular traffic and pedestrians.
Drainage: Channeling rainwater toward gullies and drains.

Deep Dive into HSN 6801

HSN serves as an international way to name and categorize goods. Under the Indian GST regime, HSN code ensures consistency when tax occurs throughout the states.

The classification logic

Products that are made up of stone, plaster, cement, or asbestos fall under the purview of chapter 68. With Stone, Plaster, Cement, or Asbestos the relevant HSN Codes Are:

HSN 6802: All worked monumental or building stones and articles thereof
HSN 6803: all worked slate

What is Converted Under 6801

HSN 6801 contains all the products stated above, but stones produced by HSN 6801 are mostly created in a raw shape or form and are not modified to be elaboratively “worked” or finished in a decorative manner. If a stone is polished to a high degree of luster carved into a unique design, or shaped or module into an exact shape the stone may have migrated HSN 6801.

GST Rates for HSN 6801

A council made up of representatives from each Indian state sets a rate of taxation on products that reflects the need and usage of those products. The GST has a lower tax rate applied to curbstones than to other products such as luxurious ornamental stones because sets are used to build public infrastructure.

The Tax Structure

As per the current notifications, the GST rates for HSN 6801 are:

Tax Component	GST Rate	Applicability
CGST	3%	Central share on Intra-state supply
SGST	2.50%	State share on intra-state supply
IGST	5%	Total tax on inter-state supply
Compensation Cess	0%	Not applicable

Input Tax Credit

Contractor's understanding of the ITC related to the use of curbs and setts will enable them to properly maximize their costs through claiming back the respective amount of GST they incurred.

In order for a buyer to claim back the GST they must ensure that their suppliers have uploaded their invoice on the government portal and also paid the appropriate amount of tax payable.
Registered tax payers can claim back the 5% GST they paid for any curbs or setts purchased only if the curbs or setts were used for the purpose of furthering their business constructing road.
In cases where the stones are used for the construction of immovable property for personal use or exempt residential projects, the buyer will be subject to the ITC limitations found within section 17(5) of CGST Act.

Common Classification Disputes

Many individuals make the mistake of conflicting HSN 6801 and HSN 6802 when classifying stones items

HSN 6801 represents the classification of cut or sawed stones that were subsequently used to pave roads - 5% GST.
HSN 6802 represents the classification of “worked” stones where the tax authority could classify as HSN 6802 should be a natural stone curb displaying a polished or mirror-like surface or intricate decorative moldings which would apply a greater tax rate of either 12% or 18%.

Pro-Tip: Noting that most government requests for quotations include an SOR and that the bulk of natural stone curb tenders generally pre-allocate 5% GST on the work to be done.

Business Impact for Manufacturers and Contractors

For Manufacturers

Quarry owners who process raw boulders into sets and curbstones must be registered if their turnover exceeds the threshold. Being in the 5% bracket makes natural stone more competitive compared to concrete alternatives, which are taxed higher.

For Contractors

Contractors working on Smart City projects or NHAI (National Highways Authority of India) projects must verify their HSN codes. Since these projects operate on thin margins, a 13% difference (5% vs 18%) in tax due to wrong HSN classification can wipe out the entire profit margin.

Conclusion

The inclusion of setts and curbstones in HSN 6801 is based on the government’s policy of keeping infrastructure costs low. With a 5% GST, natural stones are still viable options for sustainable development in cities. However there may be some ambiguity between “roughly shaped” stones included in HSN 6801 and “further worked” stones included in HSN 6802. It is the responsibility of the business to make sure that the invoice description clearly represents the nature of the goods being sold. Adhering to such compliances not only prevents legal complications but also ensures a good reputation for handling numerous government and private sector contracts.