On September 22, 2025, the GST Council announced a major reform that could significantly impact India’s construction and housing sector. The tax system has been simplified into just two slabs — 5% and 18% — with cement now taxed at 18% instead of 28%. For the first time since GST began in 2017, builders and homeowners will see a real reduction in one of the biggest cost drivers of construction. However, the savings won’t automatically flow into your pocket. To take full advantage, homebuyers, contractors, and self-builders need to understand how the new rules work. This guide explains what exactly has changed, how much you could save on materials, and what precautions to take before finalizing a building contract. The streamlined tax structure not only makes budgeting easier but also brings greater predictability to construction costs. In short, GST 2.0 is more than just a tax cut—it’s an opportunity to build more efficiently and affordably. By identifying where the savings lie and planning smartly, you can make sure your project benefits fully from these reforms. Want to know how much you could save? Try our House Construction Cost Calculator for a personalized breakdown.

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