What GST rate applies to construction?

For construction services: 18% GST (with input tax credit) or 12% GST (for affordable housing without ITC). For material supply: 28% for cement, 18% for steel, 5% for sand. Most contractors use 18% for combined works contracts.

How to Make a Professional Construction Quotation — Format, GST & Tips

Q: How to make a quotation for construction work?

A construction quotation should include: company details, client details, scope of work, line items with unit/quantity/rate, subtotal, GST calculation, discount if any, total amount, payment terms, validity period, and terms & conditions.

Q: What profit margin should a contractor keep?

Standard profit margins: 15-20% for residential work, 10-15% for commercial/government contracts, 20-30% for interior and renovation work. Always calculate your actual cost first, then add the margin.

Published: July 15, 2026 • 7 min read

A professional quotation is the difference between winning and losing a project. Clients judge your competence by how your quotation looks. Here's exactly what to include and how to calculate GST and profit margins.

What to Include in a Construction Quotation

Your Company Header — Logo, company name, address, phone, GST number
Client Details — Name, address, project location
Quotation Number & Date — For tracking (e.g., VQ-2026-001)
Scope of Work — Brief description of what's included
Line Items Table — Description, unit (sqft/cft/nos/lot), quantity, rate, amount
Subtotal
GST Calculation — CGST + SGST or IGST
Discount (if applicable)
Grand Total
Payment Terms — Advance %, milestone payments, final payment
Validity — "Valid for 30 days"
Terms & Conditions — What's included/excluded, warranty

Sample Line Items

Description	Unit	Qty	Rate (₹)	Amount (₹)
Excavation for foundation	cft	500	12	6,000
PCC (1:4:8) for foundation	cft	200	25	5,000
RCC work (M20 grade) for columns	cft	150	85	12,750
Brickwork (9 inch wall)	sqft	1200	18	21,600
Plastering (internal, 12mm)	sqft	2400	12	28,800
Flooring (vitrified tiles)	sqft	1000	65	65,000
Painting (2 coats emulsion)	sqft	2400	8	19,200
Subtotal				1,58,350
GST @ 18%				28,503
Grand Total				₹1,86,853

GST Rates for Construction

Service/Material	GST Rate
Construction services (with ITC)	18%
Affordable housing construction	12% (without ITC)
Cement	28%
TMT Steel	18%
Sand, aggregate	5%
Bricks	5%
Tiles, sanitary ware	18%
Paint	28%

How to Calculate Your Profit Margin

Calculate actual cost — Materials + labour + transport + overheads
Decide margin — 15-20% for residential, 10-15% for commercial
Add broker commission — If applicable (usually 2-5%)
Quote amount = Actual cost + Profit + Commission

Example: Actual cost = ₹10,00,000. Desired margin = 20%. Commission = 3%.

Quote = ₹10,00,000 × 1.20 × 1.03 = ₹12,36,000

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Pro Tips

Always quote in writing — Verbal quotes cause disputes
Be specific — "Vitrified tiles 2x2 ft" not just "flooring"
Mention exclusions — What's NOT included (electrical, plumbing, etc.)
Set validity — Material prices change; limit quote to 15-30 days
Keep profit calculation private — Never show actual cost to client

FAQ

How to make a quotation for construction work?

Include: company header, client details, line items (description, unit, qty, rate, amount), subtotal, GST, total, payment terms, validity, and T&C.

What profit margin should a contractor keep?

15-20% for residential, 10-15% for commercial, 20-30% for interior work. Always calculate actual cost first.

Is GST mandatory on construction quotations?

If your annual turnover exceeds ₹20 lakhs (₹10 lakhs for NE states), GST registration is mandatory. Below that, you can issue quotations without GST.