Reduced GST rate on cement to lower construction cost: Realtors' body

New Delhi, Sep 4 (PTI) Realtors' body CREDAI on Thursday said the reduction in GST rate on cement to 18 per cent from 28 per cent would lead to a lowering of construction cost, benefiting consumers and the real estate industry.

Industry players estimate that the construction cost might come down by up to 5 per cent.

The Confederation of Real Estate Developers' Associations of India (CREDAI) hailed the government's decision to simplify the GST rate structure.

This rationalisation is a commendable reform, which will bring substantial relief to all sections of society and is expected to further ease inflationary pressures, CREDAI President Shekhar Patel said.

"The reduction in GST on cement from 28 per cent to 18 per cent is a landmark move that will have a transformative impact on the real estate and construction sectors," he added.

Patel said this reduction would help bring down the overall cost of raw materials, ultimately benefiting homebuyers and boosting housing affordability.

"The process reforms announced alongside these rate changes mark a positive step towards a more transparent and efficient tax regime, likely to result in improved GST compliance and increased revenue collections," the association's president said.

Among developers, Venkatesh Gopalakrishnan, Director Group Promoter's Office, MD of Shapoorji Pallonji Real Estate (SPRE), said the rate cut to 18 per cent on cement and also the reduction in rates of some other construction materials would "significantly ease project costs for developers and boost affordability for homebuyers".

Parag M Munot, MD of Kalpataru Ltd, said the reduced rates on critical construction materials such as cement and bricks could lower procurement costs across the supply chain.

Further, Murali Malayappan, Chairman & MD of Shriram Properties Ltd, said that the reduction in GST on cement is a significant step towards making homeownership more accessible and stimulating growth in the real estate sector.

Darshan Govindaraju, Executive Director at Vaishnavi Group, said the GST rationalisation brings much-needed relief to the real estate sector by simplifying taxation and reducing costs on construction materials.

In addition, Karishmah Siingh, President - Sales, Marketing & CRM at Sattva Group, said this GST reduction on cement represents a pivotal reform that fundamentally shifts the affordability equation for Indian homebuyers.

"With Rs 12-15 per square foot in direct savings, builders now have the flexibility to pass on meaningful cost reductions to end consumers," she said.

Ankur Jalan, CEO of Golden Growth Fund (GGF), said the GST rate rationalisation is expected to streamline compliance across industries, enhance operational efficiency, and strengthen tax collections.

This reform will provide fresh momentum to the real estate sector, said Santosh Agarwal, CFO & Executive Director of Alpha Corp Development.

Sterling Developers Chairman and MD Ramani Sastri said the reduction in GST on cement and other key building materials will provide a much-needed relief for the real estate sector in the ongoing festive season.

According to Ashok Kapur, Chairman of Krishna Group and Krisumi Corporation, the real estate sector would benefit from reduced taxes on raw materials like cement and marble blocks.

Additionally, Nitesh Kumar, MD & CEO of Emami Realty Ltd, said, "The reduction in GST rates on essential construction materials such as cement, now down from 28 per cent to 18 per cent, is a transformative move that will significantly lower input costs for developers." Noting that cement is a major cost component in a project, Nimbus Realty CEO Sahil Agarwal said that the rate cut is a meaningful relief for residential projects.

Meanwhile, Akshay Taneja, Managing Director of TDI infrastructure, said the reduction of GST on cement would translate into savings of nearly Rs 30 per bag. PTI MJH MJH SHW