GST cut on cement to lower cost of infra projects, say industry players

The rationalisation of GST on cement -- a key construction material -- will help lower capital cost of infrastructure projects and improve cash flows, industry players said.

At its 56th meeting on Wednesday, the GST Council approved slashing GST rates on a number items. On cement, the council recommended the duty to be reduced to 18 per cent from 28 per cent.

The new Goods and Services Tax (GST) rate will be effective from September 22.

''The government has taken a landmark decision to reduce GST on critical construction materials such as cement. The rationalisation is expected to boost the development of infrastructure, and serve as a catalyst towards economic growth,'' said Kavita Shirvaikar, Managing Director (MD), Patel Engineering.

A spokesperson of IRB Infrastructure Developers said the proposed reduction on key inputs will provide a significant boost to the road sector, lower construction costs and improved cash flows will strengthen the financial health of developers.

Echoing similar views, Vimal Kejriwal, MD, KEC International, said the reduction in GST on cement is expected to unlock working capital, improve cash flow efficiency and accelerate project delivery timelines.

Combined with the government's ongoing infrastructure push, the reform is likely to stimulate private sector capital expenditure and attract greater investments into the sector, he said.

Sorab Agarwal, Executive Director at Action Construction Equipment Limited (ACE), said the reduction in GST on key building materials is expected to significantly ease input costs, accelerate project execution, and provide much-needed momentum to the sector.

''Separately, the reduction of GST on agricultural equipment from 12 per cent to 5 per cent is a landmark decision that will directly benefit farmers and the rural economy,'' he said Nagendra Nath Sinha, MD, Rodic Digital & Advisory, said: ''With cement and steel forming nearly 40-45 per cent of project costs, this change (GST reduction) will cut material tax burden by about 10 per cent. Such savings will make projects more viable, accelerate execution, and boost participation in public-private partnerships.''

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)