GST Cuts on Cement and Construction Materials to Benefit Homebuyers, Says CREDAI

The Confederation of Real Estate Developers’ Associations of India (CREDAI), the apex body representing the country’s real estate sector, has welcomed the recent GST cuts on cement, steel, tiles, and other construction materials. According to the developers’ body, these reductions are expected to bring tangible benefits to homebuyers across India.

CREDAI chairman Boman Irani highlighted that the rationalization of GST rates has created a “feel-good factor” among potential buyers. “The recent GST overhaul has certainly boosted consumer confidence,” he said, speaking on the sidelines of CREDAI NATCON in Singapore.

Developers are evaluating how much of the cost savings can be passed on to buyers. CREDAI president Shekhar Patel noted that while a 10% GST cut on cement could reduce the price of a bag by around Rs 30, the actual benefit to homebuyers will depend on how quickly these reductions are reflected in supply chains and construction costs.

“Whatever benefit becomes available to homebuyers will be passed on, but it also depends on manufacturers’ pricing of inputs like steel and cement,” Patel added. Despite the positive impact of GST cuts, high stamp duties continue to remain a concern, particularly in metro cities.

The impact of these changes is likely to be more pronounced in tier 2 and tier 3 cities, where construction costs often form a larger portion of the total project cost compared to land prices. In contrast, in metros such as Mumbai, where land costs dominate, the reduction in construction input costs may not significantly change overall property prices.

The GST changes are part of the broader GST 2.0 reform, which simplifies the tax structure from four slabs to primarily two — 5% and 18% — with a special rate of 40% for sin goods. This move is expected to improve housing affordability, support demand in the real estate market, and provide a boost amid inflationary pressures.

CREDAI has committed to ensuring that the benefits of these reforms reach homebuyers effectively, making housing more accessible and encouraging a healthier growth trajectory for the construction and real estate sector in India.