Will GST Rate Cuts Revitalize Housing and Construction Sectors?
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Synopsis
Discover how the recent GST rate cuts on construction materials are set to revolutionize the housing market by making it more affordable, boosting employment, and supporting sustainable development initiatives across India.
Key Takeaways
- GST rate on cement reduced from 28% to 18%
- GST on particle boards cut from 12% to 5%
- Job work tax for bricks decreased from 12% to 5%
- Support for MSME and green jobs emphasized
- Aligned with the 'Housing for All' initiative
New Delhi, Sept 19 (NationPress) The reductions in GST rates on essential construction materials and services are anticipated to enhance housing affordability, lower infrastructure expenditures, and create numerous job opportunities, according to an official announcement made on Friday.
These reforms align seamlessly with the national initiative of Housing for All and will bolster key programs such as Smart Cities, metro initiatives, and urban and rural infrastructure advancements by decreasing input costs. The statement also highlights that these changes are likely to attract increased private investment in the construction arena.
As part of the GST 2.0 reforms, the tax on cement has been slashed from 28% to 18%, effectively reducing costs that constitute 15–20% of total building expenses and approximately 11% of overall construction costs.
Additionally, the GST reduction on particle boards from 12% to 5% will serve MSME-driven clusters and promote sustainable, jute-based housing solutions. The cut in GST on marble and granite blocks from 12% to 5% will decrease flooring and finishing costs while maintaining employment for numerous workers in stone-producing regions.
Furthermore, the tax rate on job work for bricks and sand-lime bricks has been reduced from 12% to 5%, lowering costs for small house construction and supporting MSME-operated brick kilns. The GST on effluent treatment services has also been reduced from 12% to 5%, which is anticipated to foster the adoption of CETPs, green jobs, and sustainable waste management, as stated.
The Centre is advancing the vision of 'Housing for All' through two flagship programs. The Pradhan Mantri Awas Yojana–Urban (PMAY-U), initiated in 2015, provides pucca houses to eligible beneficiaries across the EWS, LIG, and MIG categories, as well as slum dwellers. PMAY–Grameen, launched in 2016, aims to deliver pucca homes with essential amenities to houseless families and those occupying kutcha or dilapidated houses in rural locales. Both initiatives work in tandem with programs like Swachh Bharat Mission, Saubhagya, and Ujjwala Yojana, ensuring beneficiaries have access to sanitation, electricity, and clean cooking fuel. This cohesive strategy promotes affordable housing while enhancing the overall quality of life.
Point of View
I believe these GST reforms signify a pivotal step towards achieving affordable housing for all. By reducing taxes on essential materials, the government is laying the groundwork for sustainable development and increased private investment, which are crucial for economic growth and job creation.
NationPress
20/09/2025
Frequently Asked Questions
How will GST rate cuts affect housing prices?
The GST rate cuts on construction materials will significantly lower costs, making housing more affordable for various income groups.
What sectors will benefit the most from these reforms?
The housing, construction, and MSME sectors will benefit the most, leading to increased employment opportunities and investment.
When were the GST reforms announced?
The GST rate reductions were announced on September 19, 2023.
What is the goal of the 'Housing for All' initiative?
The goal is to provide affordable housing to all segments of society, particularly vulnerable groups, ensuring every citizen has a decent home.
How will these changes impact job creation?
By lowering construction costs and stimulating investment, these reforms are expected to create numerous job opportunities in the construction and related sectors.
