The central government’s decision to reduce the Goods and Services Tax (GST) on cement and steel has been hailed as a game-changing move by leaders from the real estate industry.
GST Council has approved a complete overhaul of the Goods and Services Tax (GST) regime. The panel approved simplifying the GST from the current four slabs – 5 per cent, 12 per cent, 18 per cent and 28 per cent – to a two-rate structure of 5 per cent and 18 per cent. A special 40 per cent slab is also proposed for a select few items such as high-end cars, tobacco and cigarettes. This will be effective from September 22 – the first day of Navaratri.
The central government’s decision to reduce the Goods and Services Tax (GST) on cement and steel has been hailed as a game-changing move by leaders from the real estate industry. Cement will cost less with the tax rate coming down from 28 per cent to 18 per cent.
According to experts, the reduction of GST on cement is also a positive step and will help ease construction costs. Here’s what experts saidย
“The GST rationalisation announcement is expected to increase savings, boost consumption, and improve liquidity and lift overall business sentiment. This is welcome, particularly ahead of the festive season. For the real estate sector, this buoyancy is meaningful, as it will reduce the cost of construction. Housing demand is closely tied to consumer confidence and long-term financial planning. When households save more on essentials, it creates a positive environment that encourages investment in real estate, while also strengthening sentiment around property as a stable and rewarding asset class.” – Lincoln Bennet Rodrigues, Chairman and Founder, Bennet & Bernard, Goa.
โThe recent GST slab rationalisation marks a pivotal shift for the real estate sector. Affordable housing is set to gain significantly, as reduced tax outflows will make home ownership more accessible for first-time buyers and middle-income families. More importantly, these changes will also ease the monthly cash flows of Indian households since essentials are now cheaper, and families will save more on their daily necessities. This additional liquidity enables buyers to take on higher risk for long-term assets like homes, directly improving affordability. In effect, demand will be buoyed by two key factors: lower construction input costs and higher disposable incomes. This aligns well with the governmentโs push toward Housing for All and will stimulate demand in Tier 2 and Tier 3 cities, where affordability is the key driver. On the other hand, luxury housing falling under the 40 per cent slab will see muted momentum in the short term, as higher taxation makes buyers more cautious. Developers will need to innovate, focusing on differentiated experiences, green design, and value creation to maintain traction in this segment. Overall, the restructured GST slabs will not only boost affordability but also steer the market toward a more balanced and inclusive growth trajectory.โ – Deep Vadodaria, Managing Director, Nila Spaces Limited.
“The GST rate cut on cement and construction materials is truly a Diwali gift for the real estate sector. A 10 per cent reduction will significantly lower construction costs, enabling us to pass on nearly 60 per cent of the savings to homebuyers. This festive boost will enhance affordability, accelerate demand, and brighten housing dreams for many families. This move will also boost the Indian economy and help build a New Bharat.โ – Akash Kohli, Founder & CEO of Elante Group.ย
“The GST slab cut is a fantastic step towards making homeownership a reality for more people. By slashing the GST on cement and simplifying the tax structure, the government has directly addressed one of the crucial pain points for the real estate industry: high construction costs. This move is a major win, since it will allow developers to finally pass on significant savings, making homebuying a more accessible task. We expect to see a massive boost in buyer sentiment and a surge in sales this festive season. It’s a timely and much-needed reformative relief that will accelerate the โHousing for Allโ mission.” – Sumit Ranjan, COO of Roots Developers.
“The GST Councilโs move to slash tax rates on cement and other construction materials is a landmark step for the sector. Cement alone contributes nearly one-third of overall construction costs, and its rate reduction from 28 per cent to 18 per cent will directly enhance cost efficiency for developers. This will not only accelerate project timelines but also allow developers to channel savings into quality enhancements and sustainable building practices. Importantly, it improves housing affordability for end-users and boosts investor confidence in the long run. Such policy measures provide the necessary impetus for long-term growth in both residential and commercial real estate markets.โ – Aman Sharma, Managing Director and Founder of Aarize Group.
โThe rationalisation of GST slabs represents an important step toward simplifying Indiaโs tax framework and enhancing transparency in the real estate sector. By potentially reducing the tax burden on housing, this reform is expected to strengthen buyer confidence, encouraging more informed and faster decisions. For developers, a predictable and streamlined GST structure could reduce transaction complexities and enable smoother project execution. This reform will provide fresh momentum to the real estate sector, supporting sustained growth and reinforcing Indiaโs position as a dynamic housing market.โ – Santosh Agarwal, CFO & Executive Director, Alpha Corp Development Limited.