Real estate body CREDAI has committed to passing on the benefits of recent GST rate cuts on construction materials to homebuyers — especially in Tier-2 and Tier-3 cities. According to CREDAI Chairman Boman Irani, the lower tax burden should translate into reduced end-prices, with savings also reflected in lower stamp duty.
The GST reforms, which include slashing taxes on inputs like cement, steel, marble, and tiles, are expected to bring construction cost reductions of 3-5%, say industry analysts. Such savings may have a more meaningful impact in smaller cities where land costs are relatively lower, making material and finishing inputs a larger portion of total cost.
However, CREDAI cautions that actual benefit to buyers depends on how fast and fully suppliers reflect the tax cuts in material prices. Additionally, state-level levies such as high stamp duty remain outside its control, potentially dampening the overall price relief.
Overall, the sentiment among developers and buyers is positive. The GST rate adjustments are seen as providing much needed stimulus to housing demand, especially for affordable and mid-segment homes, at a time when inflation and construction input costs have been squeezing margins.
