GST Cut on Cement: Lower Costs, Higher Savings: What It Means for Homebuyers and Developers:

“...because cement is so essential for the middle class when building

homes, that is why the 28% has been reduced to 18%,” finance minister

Nirmala Sitharaman said late Wednesday

The GST Council has slashed GST on cement from 28% to 18%, effective September 22, 2025. This move is aimed at reducing input costs, boosting construction activity, and making homes more affordable. But what does this actually mean for your construction budget? Let’s break it down.

Cement Costs Before vs After GST Cut

For a 1,000 sft home in Hyderabad, construction costs average around ₹25 lakh. Out of this, assuming cement makes up about 20%, meaning the cement bill was roughly ₹5,00,000 at the old GST rate.

Here’s the math after the GST reduction:

1. Earlier, ₹5,00,000 included 28% GST → Base price ≈ ₹3,90,625

2. With the new 18% GST, cement cost = ₹3,90,625 × 1.18 ≈ ₹4,60,938

3. Savings on cement alone ≈ ₹39,000 for a 1,000 sft home ✅

Impact on the full project (₹25,00,000): ~1.56% reduction from cement savings alone. If we consider all materials and associated GST cuts including marble, granite, blocks, and finishing products where GST has dropped from 12% to 5% overall construction costs could fall by up to 5%, as cited by The Economic Times.

What This Means for Hyderabad’s Real Estate

For homebuyers, this means better affordability and stronger negotiating power. For developers, it eases margin pressure and improves project viability. With lower input costs and greater demand potential, expect more project launches, faster timelines, and competitive pricing in the coming months.

Full report: https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2163555