In a landmark move, the GST Council on September 3 announced a major rate cut on cement—slashing it from 28% to 18%. This rationalisation is being hailed as a game-changer for the real estate and infrastructure sectors, with experts highlighting its potential to bring down construction costs, revive demand, and accelerate the government’s Housing for All vision.
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Why this GST cut matters
Cement is one of the most critical materials in construction, and until now, its high 28% GST rate added a heavy burden on developers and buyers alike. With the reduction, experts believe project costs will see significant relief, enabling developers to pass on the benefit to homebuyers. This will not only make housing more affordable but also stimulate fresh demand in the property market.
Industry leaders react
Niranjan Hiranandani, Chairman of Hiranandani Group and NAREDCO National, called the move a “landmark reform.” He noted that lowering GST on essential construction inputs will ease project viability, reduce input costs, and fast-track infrastructure development. “This rationalisation is not just a boost for developers—it’s a win-win for consumers, the housing sector, and India’s long-term growth story,” he said. Hiranandani also termed the cut a “festive bonanza” that aligns perfectly with rising consumer sentiment during the festive season.
Echoing similar views, G Hari Babu, National President of NAREDCO, stressed on the timing of the decision. “Announced in the festive season, this will lift consumer sentiment, create fresh demand, and support both developers and homebuyers. It’s a progressive step that strengthens the nation’s growth story,” he said.
Deepak Kumar Jain, founder and CEO of TaxManager.in, added that since real estate is among the most labour-intensive industries, this tax relief will be a strong booster. “The rate cut from 28% to 18% on cement will lower construction costs and help developers manage budgets more efficiently,” he said.
Government’s broader reform agenda
Union Finance Minister Nirmala Sitharaman, while addressing the media after the 56th GST Council meeting, emphasized that this was part of a larger reform agenda aimed at rationalising the tax structure and simplifying compliance.
She highlighted that:
- GST slabs have been reduced to just two—5% and 18%—by merging the 12% and 28% categories.
- Inverted duty structures and classification issues have been resolved.
- The reforms aim at ease of living and doing business by simplifying registration, return filing, and refunds.
Sitharaman added, “This reform is not just about rationalising rates—it’s about structural reforms and ease of living. The Honourable PM had set the tone during his Independence Day speech by calling for reforms that deliver benefits directly to the people at the earliest.”
What this means for homebuyers
For aspiring homeowners, particularly in the affordable housing segment, this decision could translate into reduced property prices or at least slower price hikes in the coming months. With construction costs easing, developers will have more room to offer competitive pricing, making homes more accessible for middle-income and first-time buyers.
