GST Cut: A Cement and Steel Revolution Bolstering Real Estate

The central government's decision to reduce the Goods and Services Tax (GST) on cement and steel has been acclaimed as transformative by real estate industry leaders. This fiscal measure, lowering the tax rate from 28 percent to 18 percent, is expected to significantly reduce input costs, enhancing the viability of projects and providing a substantial impetus to the housing and infrastructure sectors, particularly in the affordable housing domain.

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.

(With inputs from agencies.)