GST on Cement Cut to 18%: Relief for Real Estate and Affordable Housing

The big news is that the GST council has decreased the tax on cement from 28% to 18%, as announced in its 56th meeting on September 3. This radical move is expected to ease the upfront cost in construction and give a massive boost to affordable housing. This will strengthen the real estate sector, particularly for affordable housing, by increasing accessibility to homes and providing more viable projects.

Industry stalwarts have termed this a landmark decision. Niranjan Hiranandani, chairman of Hiranandani and NAREDCO National, said, lower GST on cement input will cut costs considerably and catalyze infrastructure development. “Most benefit will accrue to affordable housing as homebuyers will gain from falling costs. This reform is win-win for developers, consumers and India’s long-term growth story,” he called it a festive season bonanza.

G Hari Babu, the national president of NAREDCO, threw the spotlight on the date of the announcement, which was just before the festive season in the country. “It will lift consumer sentiment, generate new demand, and support the economy. This is a progressive step that gives long-term momentum for real estate and homebuyers,” he said.

Deepak Kumar Jain, founder and CEO of TaxManager.in, said that the real estate sector, being labour-intensive will gain significantly. Reducing GST on such key materials like cement will lower construction costs and allow the much-needed growth of the sector,” he said.

Union Finance Minister Nirmala Sitharaman also underscored that the measure is part of larger reforms towards simplification and stability. The Council has rationalised the slabs for GST into two – 5 percent and 18 percent – thereby merging the earlier 12 percent and 28. “We have corrected inverted duty structures, resolved classification issues, and ensured predictability. These reforms are about ease of living and ease of doing business,” she told reporters post the meeting.

Being such a major input in construction, according to experts, a reduction in tax would benefit developers, homebuyers, as well as infrastructure projects. The reforms can lower costs and increase project viability, which aligns with the government’s Housing for All mission and boosts demand in the real estate sector.