Yesterday the GST Council announced a significant rationalization of GST rates, reducing slabs from four to two (5% and 18%), scrapping the 12% and 28% brackets.

This reform notably lowers the GST on key construction materials like cement from 28% to 18%, directly reducing overall construction costs by an estimated 5-6%.

For developers, this translates to substantial savings, as materials constitute around 60% of construction costs.

The simplified tax structure also minimizes compliance complexities, enhancing operational efficiency.

By passing on savings to homebuyers, developers can stimulate demand, particularly in affordable housing, while improved cash flows and reduced input costs bolster profitability, fostering growth in India’s real estate sector.