Homebuyers will not benefit much if the Goods and Services Tax (GST) on cement is reduced to 18 per cent from 28 per cent, as recently hinted by Finance Minister Arun Jaitley, said experts.

“There will not be much impact on end-users. Only those who buy a plot and build a house will benefit from lower GST on cement. Homebuyers who opt for builder apartments on the other hand won’t gain much,” said Parveen Jain, Vice-Chairman, National Real Estate Development Council.

Cement is one of the major components used in construction activity. According to experts, the total cost of construction can be divided into four segments. While cement, steel and labour account for 20 per cent each, finishing work constitutes remaining 40 per cent. “While the benefit for the homebuyers planning to buy under-constructed property would be limited, those who buy a plot and construct a house may get around 10 per cent benefit on the cost of the cement,” said Abhishek Jain, Tax Partner, EY.

On Monday, Jaitley wrote in his blog, “Our next priority will be to transfer cement into a lower slab. All other building materials have already been transferred from 28 per cent to 18 per cent and 12 per cent”.

Earlier, FM had said that the GST rate cut on cement from 28 per cent to 18 per cent might cost ₹13,000 crore to the National Exchequer.

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