The Central Government’s recent increase in the Goods and Services Tax on coal, the major fuel component of brick kilns—from 5 per cent to 18 per cent—has triggered widespread concern across the industry as well as among the public in Punjab.
The royalty on mining for brick kilns has also been increased from Rs 61,700 to Rs 2.15 lakh per year for two acres by the state government, while the GST on bricks has increased from 5 per cent to 12 per cent.
These new developments will not only impact the brick kiln industry but may also push brick prices up from Rs 6,400 with FOR (freight on road) per 1,000 bricks to Rs 7,000 with FOR.
The kiln industry, already reeling under pressure for years, is facing a further decrease in its numbers. From around 2,700 brick kilns in 2022, the number has come down to 1,500.
Brick kilns have long been the backbone of rural employment. Each kiln provides work to around 200 workers for five to six months every year, especially to uneducated labourers who have limited employment options. But industry leaders say the recent GST hike will push many small kilns towards closure.
According to the Punjab Brick Kiln Association, over the past three to four years, the number of operational kilns has dropped by 45 per cent due to several reasons, including the costly upgradation of kilns’ zig-zag technology in recent years, labour-related issues, and now the GST. Several kilns shut down because of the high cost of technology upgrade, while many others could not adopt the required changes and therefore closed.
In Punjab, kilns are mostly operated from November to May–June. A brick kiln, usually around 120 ft high (with a portion below ground level), has about 36 chambers in which 10–12 lakh clay bricks are placed for drying or hardening.
“Coal is our main fuel. With GST raised to 18 per cent and no rollback despite multiple representations, the Centre is pushing this small-scale industry towards extinction. It looks like they want big corporate houses to take over, because only they can afford such financial pressure,” said president of the Punjab Brick Kiln Owners’ Association.
‘Homes will also get costlier’
He added that delegations from the All India Brick Kiln Association had met Union ministers several times, but “nothing has been done till date”.
“The common man will feel the pinch. When bricks become costlier, homes become costlier. The government must consider the impact on ordinary people before imposing such a heavy GST on essential building materials,” he said, adding that the Punjab Government had taken a favourable step for kiln owners by exempting brick kilns from the requirement of environment clearance for mining soil to procure clay.
A owner of a brick kiln in Hoshiarpur district, said the financial burden had become unbearable. “Coal prices have jumped from Rs 11,000–12,000 per tonne to Rs 15,000–16,000, and royalty on brick earth in Punjab, which was Rs 61,700 for two acres, has shot up to Rs 2.15 lakh for the same area,” he said.
“With GST on coal and bricks increasing and royalty rates touching the sky, many kiln owners will not survive. Some will shut down within months, leaving hundreds of poor labourers jobless,” he added.
Royalty several times higher than in other states
Another kiln owner said, on the condition of anonymity, that Punjab’s royalty is one of the highest, 4–5 times more than several neighbouring states. “Not only the Centre, but the state government is also not sparing this industry by raising the royalty more than three times in one go, which is huge.”
General secretary of the Punjab Brick Kiln Association issued a strong statement: “This is not just about bricks; it is about livelihoods. Brick kilns support rural families, migrant labourers, and local economies. If the Governments continue on this path, an entire traditional industry will collapse. We urge the Centre to rethink the GST hike before it’s too late, and also request the state government to look after its small-scale industry properly, which is facing closure very fast. From 2022 to 2025, the number of kilns has come down from 2,700 to 1,500, and in my own district, the number has dropped from 162 to just 62 in a few years. Even, I used to own three kilns and now run only one.”
The brick-making season, which normally begins at the end of November and continues till May–June, has started on a worrying note. Many owners are hesitant to restart operations because of rising input costs, he said. He added that he had visited several states where the rate of bricks is Rs 10,000–12,000 per 1,000 bricks, but in Punjab, the rate is almost half.
“Even today in the Malwa region of Punjab, we are providing bricks at Rs 6400 with FOR and at Rs 5800 without FOR because we want to make the industry run, although the industry is facing a huge financial burden and profit margins have become negligible. We urge the Centre to reconsider the GST hike immediately,” he said.
