Ask a contractor whether your house got cheaper after GST 2.0 and the honest answer is "yes, but you will barely feel it." The reform that came into force on 22 September 2025 did one big thing for builders — it pulled cement out of the top 28 per cent slab and into 18 per cent — and a few small ones. What it did not do is cut the tax on most of the materials that make up a house, because those had already been moved to 18 per cent years earlier.
So the saving is real but modest, and it lands almost entirely on the structural shell. Here is what changed, what did not, and what the arithmetic looks like on an actual house. The figures are indicative October 2026 and consistent with this site's detailed guides to GST 2.0 and to the cement rate.
What got cheaper
The headline change is cement. A bag that carried 28 per cent GST from the start of GST in July 2017 now carries 18 per cent. A handful of other construction inputs dropped from 12 to 5 per cent, and three appliance categories that often sit in a building budget came down from 28 to 18. The table lists only the changes that touch a house.
| Item | Before 22 Sep 2025 | From 22 Sep 2025 | Effect on a house |
|---|---|---|---|
| Cement | 28 % | 18 % | The main saving; runs through the whole structure |
| Marble, granite, travertine blocks | 12 % | 5 % | Small; finished slabs stay at 18 % |
| Sand-lime bricks | 12 % | 5 % | Only if this specific brick is used |
| Bamboo flooring and joinery | 12 % | 5 % | Only if bamboo is chosen |
| Air-conditioners, dishwashers, TVs over 32 inch | 28 % | 18 % | Felt when fitting out, not on the shell |
What did not change
Most of the house was untouched, because it was already at 18 per cent. Steel — the other big structural input alongside cement — was at 18 per cent before the reform and stayed there. Ceramic and vitrified tiles, plywood and boards, sanitaryware, glass, wires, switches and furniture were cut from 28 to 18 per cent back in November 2017, and paint followed in July 2018. GST 2.0 did not lower any of these. That is why an interior quote, which is built almost entirely from these items, barely moves — and why a contractor cannot honestly promise a lower per-square-foot rate for tiling, carpentry or painting because of GST 2.0.
The effect on a real house budget
The useful question is not "how much cheaper is cement?" but "how much of my house is cement, and what tax did it carry?" Cement runs through footings, columns, beams, slabs, masonry mortar and plaster, so it is a meaningful share of the structural bill — but still a small share of the whole project once land, finishes, joinery, electricals and plumbing are added. On an illustrative house of about 2,000 sq ft built-up with ₹3 lakh of cement, the tax on that cement falls from ₹84,000 to ₹54,000: a saving of ₹30,000. Against a construction cost of ₹44–56 lakh at the ₹2,200–2,800 per sq ft band used on this site, that is roughly half to one per cent.
Add the appliance cuts — three or four air-conditioners moving from 28 to 18 per cent, a large television — and the portion of civil work inside an interior fit-out that uses cement, and the total realistic effect is a little higher, but still usually well under two per cent of the overall spend. A heavier building with a basement, a raft foundation or a long compound wall uses more cement and saves a little more; a light single-storey home saves less. The saving also reaches the homeowner only if the dealer or contractor passes the lower rate on, because a family building its own house cannot claim input tax credit.
Does it make a flat cheaper to buy?
Not automatically. The GST on a new flat is charged on the price, not on the materials: since April 2019 it has been 1 per cent for affordable housing and 5 per cent for other homes, without input tax credit for the builder. A lower cement rate reduces the builder's cost, but whether that reaches the price per square foot is a commercial decision, not an automatic one. A completed flat sold after its completion or occupancy certificate carries no GST on the sale at all.
Frequently asked questions
Is building a house cheaper after GST 2.0?
Yes, but only a little. The main change is cement, which fell from 28 to 18 per cent GST on 22 September 2025. On an illustrative ₹44–56 lakh house with about ₹3 lakh of cement, that is a saving of roughly ₹30,000 — about half to one per cent of the total. Counting cheaper appliances and civil work, the whole-house effect is usually still under two per cent.
What is the GST on cement now?
18 per cent, from 22 September 2025, down from 28 per cent. Within Gujarat the invoice shows 9 per cent CGST plus 9 per cent SGST; an inter-state purchase shows 18 per cent IGST. Any cement bill dated after that date still showing 28 per cent deserves a question.
Did GST on steel and tiles come down in 2025?
No. Steel was already at 18 per cent before the reform and did not change. Ceramic and vitrified tiles, plywood, sanitaryware, glass and wires were moved to 18 per cent back in November 2017 and stayed there. Only cement, a few stone and bamboo products, and some appliances changed in 2025.
Will my contractor pass on the cement saving?
Only if the contract allows it. A family building its own house cannot claim input tax credit, so whatever GST is charged is a final cost. For contracts signed before the change but billed after it, read the tax clause and agree in writing how the cement saving is treated. For a pure interior or carpentry job, expect no change, because those materials were already at 18 per cent.
Sources & standards
- GST Council, 56th meeting (3 September 2025) and the Press Information Bureau explainer on the Next-Gen GST reforms, effective 22 September 2025: cement 28 → 18 %; marble, travertine and granite blocks, sand-lime bricks and bamboo flooring 12 → 5 %; air-conditioners, dishwashers and TVs above 32 inches 28 → 18 %
- GST Council, 23rd meeting (November 2017) and 28th meeting (July 2018) — tiles, sanitaryware, plywood, glass, wires and furniture, then paints, moved from 28 to 18 %
- GST Council, 33rd and 34th meetings (2019) — residential real estate at 1 % (affordable) and 5 % (other) without input tax credit, from 1 April 2019
- Central Goods and Services Tax Act, 2017 — Section 17(5) (blocked credit for construction of immovable property on own account)
- Price ranges: indicative October 2026 estimates — confirm locally before budgeting. GST information is general, not tax advice; confirm a specific invoice with a chartered accountant
