CREDAI Promises to Pass on GST Cut Benefits to Homebuyers
The Confederation of Real Estate Developers’ Association of India (CREDAI) has committed to passing on the benefits of GST cuts on construction materials to buyers, potentially making homes more affordable. However, high stamp duty remains a concern.
Gst CutReal EstateCredaiHomebuyersAffordabilityReal EstateSep 12, 2025
The recent overhaul of the GST regime has been a significant step in the right direction, according to CREDAI. CREDAI Chairman Boman Irani stated, “The GST rate rationalisation has certainly created a feel-good factor among consumers.” The developers’ body is currently evaluating the extent to which these cost savings can be passed on to buyers.
On September 3, the GST Council revised the rates on key construction materials, including cement, steel, tiles, and other finishing inputs. This move is part of the GST 2.0, which simplifies the tax structure by reducing the number of slabs to primarily two rates: 5 percent and 18 percent. A special 40 percent rate will apply to so-called sin goods, effective from September 22.
CREDAI President Shekhar Patel explained, “If the GST on cement is reduced by 10 percent, a bag priced at Rs 350 could become cheaper by around Rs 30. However, the key question is how much of this reduction will effectively translate into real savings within the construction sector. We will have to see and calculate it, and whatever the benefit will be, it will be passed on to the customer.”
While the GST reductions on inputs like cement and steel are a positive step, the market for these materials remains highly concentrated, with a few dominant suppliers. Despite the rate cut, high stamp duty remains a major concern and places a significant burden on homebuyers. “Stamp duty is outside our purview and it requires serious attention from state governments. Even when other costs are brought down, stamp duty continues to place a significant burden on homebuyers,” Irani noted.
The impact of these GST cuts and cost reductions will likely vary from region to region. Tier 2 and 3 cities, where construction costs are often higher than land costs, are likely to see a more noticeable benefit. In contrast, in metro cities like Mumbai, where land costs far exceed construction expenses, the overall impact may be limited.
CREDAI’s commitment to passing on the GST cut benefits is a significant step towards making homes more affordable, especially in the current economic climate. However, addressing the issue of high stamp duty will require coordinated efforts from state governments to ensure a more comprehensive reduction in the overall cost of home ownership.
This move by CREDAI is expected to boost the real estate market, particularly in tier 2 and 3 cities, where the reduction in construction costs can have a more substantial impact. Homebuyers in these regions can look forward to more affordable housing options, which could stimulate demand and drive economic growth in the real estate sector.
Frequently Asked Questions
What is CREDAI's commitment regarding the GST cuts?
CREDAI has committed to passing on the benefits of the GST cuts on construction materials to homebuyers, making homes more affordable.
When will the new GST rates come into effect?
The new GST rates will come into effect from September 22.
How much could the GST cut on cement reduce the price of a cement bag?
If the GST on cement is reduced by 10 percent, a bag priced at Rs 350 could become cheaper by around Rs 30.
What is a major concern for homebuyers despite the GST cuts?
High stamp duty remains a major concern for homebuyers, as it continues to place a significant burden on them.
Which regions are likely to see the most noticeable benefit from the GST cuts?
Tier 2 and 3 cities are likely to see the most noticeable benefit from the GST cuts, as construction costs are often higher than land costs in these regions.
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