GST 2.0: Fall in input prices likely to soften realty costs

Mumbai: A 10 percentage-point reduction in the taxation for cement, the primary building material, is set to boost India's property sector, potentially lowering overall project costs for developers and homebuyers alike.

At its 56th meeting, the government slashed the GST on cement, of which India is both the world's second-biggest consumer and producer, to 18% from 28%. Cement alone accounts for a significant portion of construction expenses, and the steep reduction in tax is likely to ease cost pressures across residential and commercial projects.

Similarly, the rate on labour-intensive inputs, such as marble and travertine blocks, has been cut from 12% to 5%, while granite blocks will also attract only 5% GST compared with 12% earlier. Sand-lime bricks and stone inlay work too have seen their tax rate reduced to 5% from 12%. These cuts are expected to make finishing and structural materials more affordable, directly impacting construction budgets.


"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%," said Niranjan Hiranandani, chairman, NAREDCO National.