The upcoming GST Council meeting is expected to bring a slew of reforms in the GST structure, benefiting the economy as a whole, and the housing sector is well positioned to benefit from the simplified two-slab tax structure of 5 per cent and 18 per cent, said Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation.
With the reduction in the tax on raw materials like cement, the overall cost of constructing homes would certainly see a noticeable fall, benefiting homebuyers in the long run, he said.
The 56th Goods and Services Tax (GST) Council meeting is scheduled for 3 and 4 September 2025. In his 79th Independence Day address, Prime Minister Narendra Modi announced the implementation of next-generation GST reforms during Diwali.
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By simplifying the current four-rate structure into two by removing the 12 per cent and 28 per cent tax slabs, while retaining the 5 per cent and 18 per cent slabs, and introducing a 40 per cent slab for sin goods, the government is set to provide major relief for businesses and consumers alike, he said.
Items in the 28 per cent bracket are likely to move to 18 per cent, while those currently taxed at 12 per cent are expected to fall under the 5 per cent slab.
Various sectors of the economy, including real estate, are keeping a close eye on the upcoming meeting. According to media reports, the GST Council is expected to mull over a plan of slashing GST on cement, which is an input for the construction and real estate sector, shifting it from the 28 per cent bracket to the 18 per cent bracket.
According to industry experts, the previous four-rate GST structure often led to compliance challenges and higher input cost for sectors like construction, FMCG and automobiles. By rationalising slabs, the government aims to simplify taxation, reduce cascading effects and improve ease of doing business.
With reduction in the tax burden on key materials real estate developers may experience a decrease in overall cost of construction that could translate into an overall reduction in prices for homebuyers. Moreover, developers believe that a simplified two slab GST structure would streamline tax compliance and reduce administrative burden ultimately benefiting the consumers.
“These reforms are a timely development at a juncture when launching value-driven projects requires more careful planning for real estate developers. Looking ahead, India’s housing sector will continue to show signs of resilience and growth as the demand for quality homes remains strong,” said Kapur.
The cut in the number of GST rate slabs has backing from Opposition-ruled States also. Congress leader and its general secretary in-charge of communications Jairam Ramesh posted on X: “Eight Opposition-ruled states — Karnataka, Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu, Telangana, and West Bengal — have extended their support to the reduction in the number of GST rate slabs and a reduction in the rates themselves for items of mass consumption.”
Ramesh said the Congress has also been stressing the essentiality of ensuring that the interests of all states are fully protected.
“It hopes that the GST Council meeting scheduled for next week will not be merely a headline-grabbing exercise so typical of the (Narendra) Modi Government, but will also advance the cause of genuine cooperative federalism in letter and spirit,” he added.
