Srinagar, June 19: In what could bring in big relief to cement manufacturers of Jammu & Kashmir, and consumers alike, the Goods and Services Tax CCouncil is likely refer the issue of the reduction of GST rate on cement from the highest slab of 28% to 18% to the Group of Ministers (GoM) on rate rationalisation.
The move is likely to come into effect some time in 2024.
The cement industry and real estate firms have been asking for a reduction in the GST rate, which will reduce the cost of not only the construction sector but also lower the cost of infrastructure projects for the government.
“This will surely bring relief to J&K’s cement industry, and consumers would feel the positive impact too”, a Kashmir-based cement maker told Ziraat Times when asked if this move would bring in any input cost relief to the sector.
The 28% GST tax on cement in India has had a negative impact on the construction and real estate sectors. The tax has made cement more expensive, which has led to higher costs for developers and contractors. This has, in turn, led to higher prices for homes and commercial properties.
The GST tax has also made it more difficult for developers to get financing. Banks are reluctant to lend money to developers who are facing higher costs. This has made it more difficult for developers to start new projects and has slowed down the pace of construction.
The negative impact of the GST tax on cement has been particularly felt in the affordable housing sector. Affordable housing developers are already facing challenges, such as low margins and high land costs. The GST tax has made it even more difficult for them to build affordable homes.
The government has taken some steps to mitigate the impact of the GST tax on cement. For example, it has provided a tax exemption for low-cost housing projects. However, these measures have not been enough to offset the negative impact of the tax.
