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The GST Council’s latest decisions bring some clarity with a shift from four slabs to two and a few material rate reductions. While these are steps in the right direction, they fall short of addressing some of the most urgent needs of the housing sector.
The reduction of GST on cement from 28% to 18% will help on paper. Cement is one of the largest cost components in construction and any drop in tax should translate into relief. However, we urge cement manufacturers not to absorb this benefit through price increases. The spirit of the change is to reduce costs — those savings must flow through the supply chain, ultimately reaching homebuyers.
A few block and masonry materials have also seen downward revisions, which can assist in cost management. But the core principle of GST has always been seamless Input Tax Credit (ITC). On this, there has been no movement. Without clarity and availability of ITC across the real estate value chain, the cascading effect of taxes continues, pushing up project costs and affecting affordability.
Equally disappointing is the absence of any focused measure on affordable housing — a sector that directly touches first-time buyers and supports employment on a massive scale. This has been a long-standing request from developers and consumers alike and it remains unaddressed.
The process reforms may improve compliance over time, but the industry needs structural tax solutions, not just procedural changes. We hope the government will use this momentum to engage deeply with stakeholders and act on the remaining gaps — Input Tax Credit (ITC), affordable housing incentives and price discipline from key material suppliers.
CREDAI Tamil Nadu remains committed to working constructively, but it is equally important that policy keeps pace with the realities on the ground. The housing sector can be a powerful engine for economic and social development — provided that taxation supports, rather than hinders, its growth.
