Arun Shukla, President and Director, JK Lakshmi Cement, comments on the GST rate reduction for cement and allied building materials, and its impact on construction costs, competitiveness and infrastructure development.
The recent announcement by the GST Council on September 3, 2025, is a watershed moment in the history of tax reform in India. By slashing the GST rate on cement from 28 per cent to 18 per cent, and reducing rates on other base materials like marble, travertine, granite blocks, and sand-lime bricks from 12 per cent to 5 per cent, the Government of India has given two very important industries, cement and allied industries, a much appreciated support in the long-standing anomaly in taxing cement.
This foundational input for construction, at one of the highest rates among essential building materials, is aligned with Prime Minister Narendra Modi’s vision of lowering the tax burden on the common man and stimulating economic growth in the country. These reforms, part of the Next-Gen GST’s simplified two-slab structure (5 per cent and 18 per cent), ensures parity with other core materials like steel, aligning India’s tax structure with global practices. From September 22, 2025, these reforms are set to disrupt the pace of construction, real estate and infrastructure developments in India.
From the perspective of the cement sector, this rate cut comes at the most crucial time. Cement as a basic input in housing and infrastructure projects had carried a high tax burden for long, that led to high construction costs. This relief from costs will make domestic cement manufacturers more competitive, creating a level playing field with global peers, allowing optimised pricing and investments in capacity upgrade. In an economy where demand is inherently tied to cycles of economic activity, this sort of fiscal relief can revive production volumes, perhaps offsetting slowdowns witnessed in recent quarters on account of inflationary pressures.
Boosting economic growth
The cement sector, employing millions directly and indirectly, will benefit from employment generation in construction networks. A fairer tax structure is likely to boost cement consumption, supporting rural and semi-urban economies where cement factories are predominantly located. Furthermore, the simplified GST structure reduces compliance costs, enabling manufacturers to concentrate on innovation, like eco-friendly cement options that adhere to India’s net-zero targets.
The changes also promote an economic multiplier effect on a wider scale. These reforms are expected to increase consumer buying power, pushing consumption across industries, bringing the benefits of ‘Laffer curve’ into picture.
To sum up, the rationalisation of GST is a strategic facilitator of inclusive prosperity for all. By ensuring affordability, transparency, and ease of doing business, these reforms enable the cement sector to make significant contributions to India’s development narrative. With Diwali looming near, this ‘gift’ from the Government of India holds out hopes of greater opportunities for builders, buyers, and the economy as a whole. The industry is set to use this opportunity to construct a more robust, resilient India.
About the author:
Arun Kumar Shukla, President and Director, JK Lakshmi Cement, holds a BE in Civil, is an alumnus of IIM, Calcutta, and has also done leadership and general management programme from INSEAD, France, with close to three decades of experience in leadership roles across cement and steel industries.
