GST Reduction on Cement and Steel: A Boon for Real Estate and Affordable Housing
The central government's decision to reduce the GST on cement and steel from 28% to 18% is expected to significantly lower input costs and boost the real estate and infrastructure sectors, particularly in affordable housing.
Gst ReductionReal EstateAffordable HousingConstruction CostsEconomic GrowthReal Estate NewsSep 04, 2025
According to Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa at CBRE, the reduction is noteworthy. 'Given that cement, steel, and other materials typically constitute approximately 40-45 percent of total construction costs, this tax cut will substantially decrease project expenses. Developers may now transfer part of these savings to homebuyers, improving affordability and stimulating demand across various segments,' he elaborated.
Niranjan Hiranandani, Chairman of Hiranandani Group and NAREDCO National, described the GST cut as a 'festive bonanza' for Indian consumers and a strategic boost for the economy. He regarded the tax rationalization as a landmark reform that would significantly alleviate input costs and accelerate infrastructure development across the nation, further bolstering the government's 'Housing for All' initiative. The industry's consensus is that this move will lower construction expenses, stimulate homebuyer sentiment, and drive purchasing decisions, thereby creating momentum in the real estate and infrastructure sectors.
The reduction in GST is expected to have a ripple effect on the economy. Lower input costs mean that developers can offer more competitive prices, making homes more affordable for the average buyer. This, in turn, is likely to increase demand, particularly in the affordable housing segment, which has been a key focus area for the government. The move is also expected to attract more investment into the real estate sector, as lower costs and higher demand make it a more attractive market.
Furthermore, the reduction in GST on cement and steel is expected to have a positive impact on employment. The real estate and construction sectors are significant employers, and the boost in activity is likely to create more job opportunities. This is especially crucial in the current economic climate, where job creation is a major concern.
In conclusion, the reduction of GST on cement and steel is a strategic move that is expected to benefit multiple stakeholders, from developers and homebuyers to the broader economy. It is a step in the right direction towards achieving the government's vision of 'Housing for All' and fostering economic growth.
Frequently Asked Questions
What is the new GST rate for cement and steel?
The new GST rate for cement and steel has been reduced from 28 percent to 18 percent.
How will the GST reduction benefit the real estate sector?
The GST reduction will lower input costs, making projects more viable and affordable for homebuyers, thus stimulating demand and boosting the sector.
Who are some of the key industry leaders supporting this move?
Key industry leaders like Anshuman Magazine from CBRE and Niranjan Hiranandani from Hiranandani Group have praised the GST reduction for its positive impact on the real estate and infrastructure sectors.
What is the expected impact on affordable housing?
The reduction in GST is expected to lower construction costs, making homes more affordable and accessible, particularly in the affordable housing segment.
How will this move affect employment in the construction sector?
The reduction in GST is likely to create more job opportunities in the construction sector due to increased activity and investment.
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