By kunal vashisht
In a move that could be described as a Diwali gift to millions of aspirational Indians, Under the guidance of prime minister Shri Narendra Modi , the Government’s ambitious GST 2.0 reform is set to dramatically alter the economics of home-building. Effective September 22, 2025, the GST Council has slashed the tax on core construction input cement from 28% to 18% — a sweeping 10-percentage-point reduction that promises meaningful relief for developers and dream-chasing families alike.
But the windfall doesn’t stop there. Finishing materials such as granite, marble, travertine blocks, and sand-lime bricks have seen their GST rates plummet from 12% to 5%, delivering equally significant cost relief in downstream construction processes.
This reform is part of a broader simplification—India now operates under a streamlined two-slab structure of 5% for essentials and 18% for standard goods, replacing the earlier complexity of four slabs (5%, 12%, 18%, 28%) and curbing procedural opacity.
A Financial Reprieve for Affordable Housing
While cement accounts for about 10–12% of total construction costs, the GST reduction could translate into 5–7% lower project expenses, especially in affordable and mid-income housing segments . Analysts foresee developers swiftly passing on part of these savings, catalyzing a renewed momentum in housing demand during the festive season.
Indeed, cement prices may dip by ₹25–30 per 50 kg bag, offering tangible cost relief to individual homeowners and self-builders.
A Strategic, People-Centric Reform
This recalibration of tax policy exemplifies governance that is both empathetic and progressive—prioritizing affordability without compromising broader fiscal stability. The reform expects to cost the government approximately ₹48,000 crore, a calculated investment aiming to revitalize demand and amplify spending across sectors .
By reducing construction costs, the reform not only enables faster project rollouts and greater viability but also nurtures the broader “Housing for All” ambition. For many, the dream of owning a home may now inch closer to reality.
⸻
What this means in clear terms: • Cement: GST now 18% (from 28%) • Granite, marble, sand-lime bricks, travertine: 5% (from 12%) • GST structure: Simplified to 5% (essentials) and 18% (standard items)
Why it matters: • Reduces overall construction cost by ~5–7% • Helps affordable and mid-income housing become more attainable • Offers real, festive-season relief, especially for first-time homebuyers • Reflects a pragmatic, citizen-first policy ethos
This GST rationalisation is more than just fiscal policy—it is a vivid testament to governance with heart. Through this bold, timely measure, the government not only lowers costs but rekindles hope: for families yearning to own their own homes, it is a beacon lighting the way.
