The 56th GST Council meeting, set for 3–4 September 2025, is expected to pave the way for sweeping tax reforms that will benefit India’s housing sector. In his 79th Independence Day speech, Prime Minister Shri Narendra Modi announced next-generation GST reforms to be rolled out during Diwali. The new system will simplify the current four-tier structure by retaining only the 5% and 18% slabs, eliminating the 12% and 28% rates, and introducing a 40% tax slab for sin goods. Items currently under the 28% bracket are likely to shift to 18%, while those taxed at 12% may move to 5%, significantly reducing costs for businesses and consumers.
Real estate stakeholders are particularly hopeful that GST on cement will be slashed from 28% to 18%, easing input costs for construction. Experts note that the earlier multi-slab system created compliance challenges and raised expenses for industries such as real estate, FMCG, and automobiles. The rationalised structure is designed to streamline taxation, reduce cascading costs, and improve the ease of doing business.
For developers, the reduction in material costs could lower construction expenses, potentially making homes more affordable for buyers. The simplified two-slab system would also ease tax compliance and administrative processes, benefiting both businesses and consumers.
Commenting on the development, Mr. Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation, said, “The upcoming GST Council meeting is expected to bring reforms that will benefit the economy as a whole. The housing sector, in particular, stands to gain from the two-slab GST structure. A reduction in taxes on inputs such as cement will directly reduce construction costs, ultimately benefiting homebuyers.”
He added that the reforms come at a crucial time when developers are focusing on value-driven projects. “With demand for quality homes staying strong, the sector will continue to show resilience and growth,” he noted.
