When the government revised GST on cement to 18%, it reshaped how India’s construction sector manages material costs. Builders and contractors across the country began searching for smarter ways to reduce their overall concrete expenses. Parishi Rental Services explains RMC vs Raw Material Cost Calculation below
That’s where direct raw material purchase comes in — a strategy helping developers save nearly 15–20% on their Ready Mix Concrete (RMC) cost.
At Parishi Rental Services, India’s trusted name in RMC plant rental and concrete equipment solutions, we help builders set up in-house batching plants to save on GST and optimize project costs without compromising quality.
Under the revised GST structure, cement and RMC products both attract 18% GST. However, the way this tax applies makes a huge difference:
RMC suppliers charge 18% GST on the total invoice amount, which includes material cost, production, transport, and margin.
Builders purchasing raw materials directly pay 18% GST only on individual inputs (cement, sand, aggregates, admixtures) — all of which are eligible for input tax credit (ITC) under construction activity.
So, while the percentage looks the same, builders who produce concrete in-house actually recover their GST through input credits, unlike when they buy from RMC vendors. It will directly impact in RMC vs Raw Material Cost Calculation calculation.
Most builders assume RMC pricing is straightforward. But a deeper look often reveals hidden margins and compromises. Here’s how:
Profit Margin: RMC suppliers usually add 5–10% margin over raw material costs.
Reduced Cement Content: To stay competitive, many suppliers reduce cement quantity in mix design.
Use of Fly Ash or GGBS: To lower cost, suppliers often replace 20–40% of cement with fillers like fly ash or GGBS.
Material Quality: Some deliver non-VSI aggregates or Zone 3 sand, while billing for VSI River Sand.
Short Deliveries: A transit mixer (TM) promised for 7 m³ often delivers only 6.5–6.8 m³ per batch.
📍 Example:
A builder in Ahmedabad recently paid for premium VSI sand in RMC but received non-VSI Zone 3 sand — leading to weak concrete strength and extra rework costs later.
VSI (Vertical Shaft Impactor) Material
Machine-made aggregates using a VSI crusher. They are uniform, cubical, and strong, providing better bonding in concrete.
Non-VSI Material
Naturally crushed or uneven particles with variable strength — they cause segregation and reduce durability.
River Sand (Zone Classification)
Zone 1: Coarse — best for concrete
Zone 2: Medium — acceptable for RMC
Zone 3: Fine — more silt, weak for concrete
Using VSI aggregates with River Sand Zone 2 ensures ideal concrete performance and finish.
The following data (EX Ahmedabad – October 2025, VSI Material, Banas River Sand) shows how direct raw material purchase outperforms RMC vendor pricing in cost efficiency.
Assumptions: Mix design per m³; rates are Basic (₹/1000 kg); GST shown per item; wastage cost = waste kg × rate.
Services: Mixing ₹850 +18% GST, Electricity ₹25 (GST 0%).
All numbers rounded for site readability.
RMC vs Raw Material Cost Calculation below
| Sr. no. | M25 Mix Design | Rate (₹ / 1000 kg) | Material used | Total Tax Paid (₹) | ||||||
| Material | Base Qty (Kg) | Base Cost (₹) | Gst % | With Gst (₹) | Rate / Qty(₹) | Wastage % | Waste (kg) | Total (Kg) | ||
| 1 | River Sand | 810 | ₹780 | 5% | 819 | 663 | 10% | 66 | 730 | 36 |
| 2 | 10 mm | 449 | ₹1,000 | 5% | 1050 | 471 | 5% | 24 | 495 | 25 |
| 3 | 20 mm | 688 | ₹1,150 | 5% | 1207.5 | 831 | 5% | 42 | 872 | 44 |
| 4 | water | 180 | ||||||||
| 5 | Admixer | 3 | ₹55,000 | 18% | 64900 | 195 | 2% | 4 | 199 | 36 |
| 6 | Cement | 370 | ₹5,100 | 18% | 6018 | 2227 | 1% | 22 | 2249 | 405 |
| 7 | Flyash | 0 | ₹2,100 | 18% | 2478 | 0 | 1% | 0 | 0 | 0 |
| 8 | Mixing | ₹850 | 18% | 1003 | 1003 | 153 | ||||
| 9 | Electricity | 25 | ||||||||
| sum | 2500 | 5415 | 158 | 698 | ||||||
| Wastage | 158 | |||||||||
| Rate with GST for Builder | ₹ 5,573 | |||||||||
| Basic Rate without GST | 698 | ₹4,874 | ||||||||
| Rate with 18 % Gst From Rmc Supplier | Add 18% – Deduct Input Credit | ₹5,878 | ||||||||
Click Here for 🧮 An Excel-based “RMC Cost Calculator” is available from Parishi Rental Services to help builders input their mix design, update raw material rates, and estimate real-time cost savings.
from this anyone can directly find cost of RMC vs Raw Material Cost Calculation.
Builder Direct — Subtotals (rounded):
Basic (₹): 4,874
GST (₹): 698
Gross with GST (₹): 5,573
🧾 Effective after ITC (builder claims full input credit on materials + services): ~₹4,874/m³ (round to ₹4,900/m³ for posting).
Scenario | Basic (₹/m³) | GST (₹/m³) | Gross with GST (₹/m³) | Effective after ITC (₹/m³) | ₹ / kg (Basic) | ₹ / kg (Gross) | GST actually paid in cash (₹) |
|---|---|---|---|---|---|---|---|
Builder – Direct Raw Materials | 4,900 | 698 | 5,598 | 5,598 | 2.00 | 2.24 | 698 |
RMC Vendor – Invoice (market) | 5,000 | 900 | 5,900 | 5,900 | 2.00 | 2.36 | 900 |
| 202 Extra GST |
Notes (to avoid disputes on site):
The ₹5,900/m³ RMC figure mirrors typical vendor billing (basic ~₹5,000 + 18% GST ~₹900).
Direct purchase shows GST outflow ~₹698/m³ on inputs, which the builder sets off via ITC, making the effective landed cost ≈ basic.
Where builders cannot (or choose not to) avail ITC on vendor RMC invoices (common for own-construction that capitalizes into immovable property), the comparison is ₹4,900 vs ₹5,900 — a ~₹1,000/m³ saving (≈15–20%).
Beyond GST savings, in-house concrete production reduces multiple site-level costs. Here’s how:
On-Site RMC Setup:
Government permits batching plants within 50 meters of site boundaries at an annual fee of just ₹45,000 (Ahmedabad license).
Direct Pumping Advantage:
Using direct pumping (up to 150 m range) from the batching plant to structure minimizes mixer dependency — saving transport and manpower costs.
Continuous Pour Efficiency:
A 30 CMT/hour RMC plant maintains 26 CMT/hour output on average, ensuring faster casting cycles and fewer idle hours.
Better Control & Quality:
In-house batching means consistent cement ratio, water-cement balance, and cube strength, leading to higher durability and fewer site disputes.
By purchasing raw materials directly and producing RMC in-house, builders enjoy:
💰 10–20% cost savings on concrete
📊 Full GST input credit eligibility
🧱 Superior quality using VSI materials and River Sand
⚙️ Better control, faster output, and reliable supply
For modern construction, cost-efficiency and quality go hand-in-hand — and in-house RMC production delivers both.
Parishi Rental Services specializes in RMC plant rentals, concrete pump rentals, boom pumps, tower cranes, and complete site setup solutions with full Operation & Maintenance (O&M) support.
👉 Contact Parishi Rental Services today to install your in-house RMC setup and start saving up to 20% on every cubic meter of concrete.
now you know in RMC vs Raw Material Cost Calculation what is better
Internal Link: RMC Plant Rental – Parishi Rental Services
External Link: CBIC – GST on Cement Official Page
