GST on Cement Reduced to 18%, Boosting Affordable Housing and Construction
The GST Council has cut the tax rate on cement from 28% to 18%, a move expected to significantly lower construction costs and make affordable housing more accessible. This decision supports the government’s Housing for All mission.
GstCementAffordable HousingConstruction CostsReal EstateReal Estate NewsSep 03, 2025
Niranjan Hiranandani, chairman of Hiranandani and NAREDCO National, emphasized that the reduction in GST on critical construction materials like cement from 28% to 18% is a landmark reform. This move will significantly ease input costs, improve project viability, and accelerate infrastructure development across the country.
“Affordable housing, in particular, stands to gain as reduced construction costs can be passed on to homebuyers, making homes more accessible while supporting the government’s Housing for All vision. This rationalisation is not just a boost for developers, it is a win-win for consumers, the housing sector, and India’s long-term growth story,” Hiranandani stated, adding that GST rationalisation is a festive bonanza for Indian consumers and a strategic boost for the economy.
Deepak Kumar Jain, founder and CEO of TaxManager.in, also highlighted the positive impact of this decision on the real estate sector. Being one of the most labour-intensive sectors, real estate is expected to gain significantly from the reduction of GST rates on key construction materials such as cement. This move will help lower overall construction costs to some extent.
The 56th GST Council meeting decided to rationalise GST rates to two slabs of 5% and 18% by merging the 12% and 28% rates. This rationalisation is expected to simplify the tax structure and further benefit various sectors of the economy.
Overall, the reduction in GST on cement is a positive step that is likely to have far-reaching benefits, particularly in the affordable housing segment. It not only supports the government’s initiatives but also enhances the affordability and accessibility of homes for a broader segment of the population.
Frequently Asked Questions
What is the new GST rate for cement?
The new GST rate for cement has been reduced from 28% to 18%.
How will this reduction in GST benefit the real estate sector?
The reduction in GST on cement will lower construction costs, making it more viable for developers to build affordable housing and pass on the savings to buyers.
What is the Housing for All mission?
The Housing for All mission is a government initiative aimed at providing affordable housing to all citizens, particularly the economically weaker sections of society.
How does the reduction in GST on cement support the Housing for All mission?
By reducing construction costs, the lower GST rate on cement makes it more affordable to build houses, which aligns with the government’s goal of providing housing for all.
What other changes were made in the 56th GST Council meeting?
The 56th GST Council meeting decided to rationalise GST rates to two slabs of 5% and 18% by merging the 12% and 28% rates.
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