The new Goods & Services Tax (GST) structure effective September 22 brings a majority of items in the 5% and 18% slabs. Apart from the household and medical items getting benefitted, the construction materials too have come under reduced tax slab, that will lower construction costs and make housing more affordable for homebuyers.
The timing of this decision is equally significant. Announced during the festive season, it will lift consumer sentiment and create fresh demand. It will act as a strong booster for the homebuyers, and encourage developers.
Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd. wholeheartedly welcomed the GST Council’s move on rate rationalization ahead of the festive season. “By reducing the tax burden, the move comes as a major relief for the common man. The housing sector, particularly, stands to benefit from GST reduction on input materials like cement from 28% to 18% and granite blocks from 12% to 5%, as this will ultimately reduce home prices for consumers and create sustainable demand across segments.”
Dr Niranjan Hiranandani, Chairman, Hiranandani welcomed the decision, “The GST rationalization is 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%. At a time of global uncertainty, such fiscal stimulation underscores the resilience of our domestic economy and strengthens confidence in India’s growth trajectory. Industry and consumers alike stand to benefit from this progressive step.”
Industry experts concur that for the real estate and infrastructure sectors, the reduction of GST on critical construction materials like cement and steel from 28% to 18% 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.
G Hari Babu, National President of NAREDCO adds, “The GST rationalisation is a very important step, and we welcome it wholeheartedly. This move brings special relief to real estate and its allied industries. Lower GST on key materials like cement and steel will directly reduce costs. Projects will become more viable and progress faster. Affordable housing will gain the most, as reduced construction costs can be passed on to homebuyers. This will make homes more accessible and push forward the government’s Housing for All vision. The entire value chain of housing and infrastructure will benefit from this reform.”
Outcome of the 56th Meeting of the GST Council has indeed given a major push to the real estate sector, specially making homeownership more accessible for a wider population.
The simplified two-tier structure will make compliance easier for real estate developers, increase transparency, and improve the supply of quality homes at competitive prices, ultimately benefiting end-users in the long run.
