The 56th meeting of the Goods and Services Tax (GST) Council has approved the reforms that were announced by Prime Minister Shri Narendra Modi on 15th August 2025.
These reforms are being considered landmark as they focus on providing major relief to the common man of India by reducing the tax burden on essential goods and services, simplifying compliance for businesses, and promoting overall economic growth.
India’s real estate sector has welcomed the move enthusiastically. Experts have particularly noted that the reduction of GST from 28% to 18% on cement and marbles, and from 12% to 5% on granite blocks, would lead to an overall decrease in the final cost of housing units, benefiting homebuyers significantly.
“We wholeheartedly welcome the GST Council’s move on rate rationalisation 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,” said Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd.
“This reform gives a major push to the housing sector making homeownership more accessible for a wider population,” he added.
Mr. Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation, said, “The GST Council’s decision to approve the implementation of next-generation GST reforms is a crucial step towards simplifying India’s tax structure and boosting economic growth.
For real estate, these reforms are particularly significant as they will directly benefit from reduced taxes on raw materials like cement and marble blocks, lowering the cost of constructing homes, ensuring easier compliance for developers, and improving overall affordability for homebuyers.”
Mr. Sumit Agarwal, Director, Ashtech Group, said, “The government’s move to reduce GST on cement, marble, and other key inputs will significantly reduce construction costs in both real estate and infrastructure.
This is a significant step that is expected to not only ease the burden on developers but also stimulate demand and give a strong boost to the industry as a whole.”
Mr. Vikas Bhasin, Managing Director, Saya Group, said, “We welcome the government’s decision on broad GST rate rationalization, which will benefit the public at large.
The reduction of GST on cement is also a positive step and will help ease construction costs. However, it is important to note that construction materials account for only about 25–30% of the overall cost of real estate projects, and cement is just one of the many inputs. Therefore, the impact of this move on end prices will be limited.”
Mr. Deepak Kumar Jain, Founder and CEO of TaxManager.in, said, “Real estate, being one of the most labour-intensive sectors, is expected to gain significantly from the reduction of GST rates—from 28% to 18%—on key construction materials such as cement, tiles, and other inputs.
This move will help lower overall construction costs to some extent. It is also expected that developers will pass on these benefits to homebuyers by reducing property prices, which have risen sharply over the past few years.”
Mr Vimal Nadar, Senior Director & Head of Research, Colliers India, said The newly announced two-slab GST structure of 5% and 18% is a progressive move to rationalize the prevailing inverted duty structure, improvise classification, simplify approvals & processing refunds.
These measures will surely cut costs at different tiers while enhancing the ease of doing business and driving consumption.
Within real estate, the slashing of GST on cement will play a critical role in rehauling project cost structures as cement forms a major value component in the overall cost of construction. Residential real estate, particularly new homebuyers, stand to gain as developers are likely to pass on the benefit of lower costs in the form of reduced housing prices.
Developers’ profitability margins, too can potentially improve, enhancing the overall financial health of the real estate sector. The timing of this rollout is appropriate, with the festive season in the offing and the real estate sector is already reaping the benefits of favourable interest rates.
Mr Piyush Bothra, Co-Founder and CFO, Square Yards said The latest GST restructuring comes as a major boost for the real estate sector. With the reduction in costs of key construction materials such as cement and steel, input expenses for developers are expected to ease, making projects more viable.
The move towards a simplified two-slab structure will also streamline compliance, making processes smoother and faster. For the residential segment, this is likely to translate into tangible benefits for homebuyers as developers pass on the savings over the coming months.
While the impact may take some time to reflect, it could provide much-needed relief in the backdrop of rising property prices and add to overall affordability. Coupled with the optimism of the upcoming festive season, these reforms are well placed to drive stronger demand in the property market.
Mr Shrinivas Rao, FRICS, CEO, Vestian said “The recent reduction in GST rates is poised to strengthen the real estate sector by reshaping demand–supply dynamics. Lower GST on construction materials is expected to enhance housing affordability by reducing input costs, while reduced GST on other goods could improve disposable income, thereby stimulating real estate demand.
However, the overall impact may remain limited if these savings are not adequately passed on to end-consumers.”
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