GST 2.0: Significant Cuts in Cement and Other Construction Materials to Boost India's Real Estate Sector
India's real estate sector is set for a significant boost as the government slashes GST rates on key construction materials, including cement, marble, and granite, potentially lowering project costs for developers and homebuyers.
GstReal EstateConstruction MaterialsCost ReductionEconomic GrowthReal EstateSep 05, 2025
At its 56th meeting, the government decided to cut the GST on cement, a primary building material, from 28% to 18%. India is the world's second-largest consumer and producer of cement, and this reduction in tax is likely to alleviate cost pressures across residential and commercial projects. Cement alone accounts for a substantial portion of construction expenses, and the steep reduction in tax is expected to have a ripple effect on overall project costs.
Similarly, the GST on labor-intensive inputs such as marble and travertine blocks has been reduced from 12% to 5%. The tax rate on granite blocks has also been slashed to 5% from 12%. Additionally, the tax rate on sand-lime bricks and stone inlay work has been reduced to 5% from 12%. These cuts are expected to make finishing and structural materials more affordable, directly impacting construction budgets.
Niranjan Hiranandani, chairman of NAREDCO National, commented, “The GST rationalisation is a festive bonanza for Indian consumers and a strategic boost for the economy. By enhancing purchasing power, stimulating consumption, and helping contain inflation, this reform creates a multiplier effect that will propel India's GDP growth beyond 8%.”
The reduction in GST rates on these key materials is expected to have a multifaceted impact on the real estate sector. For developers, the lower costs will translate into higher profit margins and the ability to offer more competitive pricing to homebuyers. For homebuyers, the reduced costs will make purchasing a home more affordable, potentially increasing demand in the market.
Moreover, the cuts in GST rates are likely to stimulate investment in the construction sector, creating more jobs and boosting economic activity. The reduced tax burden on construction materials will also make it easier for smaller developers to compete in the market, promoting a more equitable distribution of economic benefits.
In summary, the government's decision to reduce GST rates on key construction materials is a significant step towards revitalizing the real estate sector. It is expected to lower costs, enhance affordability, and stimulate economic growth, making it a win-win for all stakeholders in the industry.
Frequently Asked Questions
What is the new GST rate for cement in India?
The new GST rate for cement in India has been reduced to 18% from 28%.
How will the reduction in GST rates affect the real estate sector?
The reduction in GST rates on key construction materials is expected to lower overall project costs, making it more affordable for developers and homebuyers, and stimulating economic growth.
Which other construction materials have seen a reduction in GST rates?
Marble and travertine blocks, granite blocks, sand-lime bricks, and stone inlay work have all seen their GST rates reduced to 5% from 12%.
Who is Niranjan Hiranandani, and what is his role?
Niranjan Hiranandani is the chairman of NAREDCO National, a leading real estate association in India. He has commented positively on the GST rationalisation, highlighting its benefits for the economy.
What is the expected impact of these GST cuts on India's GDP growth?
The GST cuts are expected to enhance purchasing power, stimulate consumption, and help contain inflation, potentially propelling India's GDP growth beyond 8%.
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