Lower GST on Cement Will Not Make Apartments Cheaper
Jul 05, 2019 Real Estate News
Post general election, the first meeting of GST Council began on 21st June. In this 35th edition of the council meeting, the council is expected to take the critical decision on the reduction of GST on electric cars, revenue system, of the states and the new return filing system.
The developers are looking forward to the meeting. It is expected that the GST slab on the cement, which is 28 percent at present will come down to 18 percent. The developers have been requesting the council to reduce the GST on cement since the GST was rolled out.
Bringing down the GST rates will help create more jobs in the construction and development areas. Not only the housing industry but the infrastructure industry will be benefitted by it too. But one cannot overlook the financial strain that will increase if the GST on steel and cement reduces. Since the time right now is very crucial for the real estate sector of the country, the experts are arguing against the reduction of GST.
The production of cement was in abundance last year, and the supply was surplus. However, no change in the cost of property pricing was seen. The decrease in the input cost boosts the supply in the pipeline, which helps in keeping the prices in check.
The GDP of the country has fallen beyond the expectation; it is the chance for the government to provide the stimulus to the sector that will help it in growing back. The tax revenues have been falling as well, so it is a question of how much it can help the economy in the long run.
The developers are looking forward to the meeting. It is expected that the GST slab on the cement, which is 28 percent at present will come down to 18 percent. The developers have been requesting the council to reduce the GST on cement since the GST was rolled out.
Bringing down the GST rates will help create more jobs in the construction and development areas. Not only the housing industry but the infrastructure industry will be benefitted by it too. But one cannot overlook the financial strain that will increase if the GST on steel and cement reduces. Since the time right now is very crucial for the real estate sector of the country, the experts are arguing against the reduction of GST.
Will homebuyer be benefitted from the move?
Experts are in the opinion that even though the GST on the construction material comes down, it is unlikely that the cost of the property prices will reduce. To answer it more precisely, it will depend on the developer and whether they pass on the benefit to the home buyer or not. This is a similar situation to when the RBI reduced the repo rates. The benefits to the home loan borrowers have been minimal even after the RBI reduced the repo rates three times in a row.The production of cement was in abundance last year, and the supply was surplus. However, no change in the cost of property pricing was seen. The decrease in the input cost boosts the supply in the pipeline, which helps in keeping the prices in check.
Government’s decision:
Since GST has rolled out, there has been constant demand from the manufacturers and developers to reduce or change the GST slab. The automobile sector of the country has been hit as well due to the GST albs. Many companies have shut down their production while others have been forced to close a few of their shops due to a reduction in the demand.The GDP of the country has fallen beyond the expectation; it is the chance for the government to provide the stimulus to the sector that will help it in growing back. The tax revenues have been falling as well, so it is a question of how much it can help the economy in the long run.
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