GST Cut On Cement To Boost Sector, Accelerate Infrastructure Growth: Industry Players

The GST rate reduction on cement will not only support domestic manufacturers but also accelerate the pace of infrastructure development and catalyse industrial expansion in India, industry players said on Thursday.

A reduction in GST is expected to enhance the competitiveness of the Indian cement industry by creating a level playing field with global peers, said the Cement Manufacturers' Association.

"For a long time, cement has been taxed at one of the highest rates among essential building materials compared to sectors such as steel and several other construction input materials. Lowering the rate to 18% corrects this long-standing anomaly and ensures parity with other core materials," CMA President Neeraj Akhoury said.

The GST Council on Wednesday approved the reduction of GST on cement from 28% to 18%.

Welcoming the development, Akhoury, who is also Managing Director, Shree Cement, said cement is a foundational input material for infrastructure and housing, and the move will likely boost consumption, augmenting considerable infrastructure, including affordable housing.

Adani Cement, which owns Ambuja Cements & ACC, said a reduction in duty on cement will "accelerate the nation's infrastructure pipeline, catalyse industrial expansion, and strengthen India's march towards a multi-trillion-dollar economy".

"This reform is more than a tax rationalisation. It is a signal of confidence, momentum, and purpose, ensuring that India's next era of growth is built on a foundation that is stronger, smarter, and sustainable," said Adani Cement CEO Vinod Bahety.

A progressive policy for cement is therefore a direct investment in India's future, he asserted.

"This move further strengthens our resolve to scale capacity, deliver premium and sustainable solutions backed by world-class R&D, and energise the infrastructure that underpins India's growth story," said Bahety.

According to Grant Thornton Bharat Partner and Tax Controversy Management Leader Manoj Mishra, it is a significant structural relief for the real estate sector.

"Construction materials account for roughly 30-35 per cent of total project costs in affordable housing, with cement being one of the most cost-intensive components. For developers, this reduction eases working capital pressure in a labour-intensive sector with tight margins, supporting better project viability and timely execution," he said.

According to the CMA data, the Indian cement industry has a total installed capacity of nearly 700 million tonnes per annum (MTPA).

The industry has been witnessing a phase of consolidation with the Aditya Birla group firm UltraTech, which has over 200 MTPA capacity, and Adani group firm Adani Cement, with over 100 MTPA, acquiring small companies.

The industry expects growth between 7 to 8% in the current fiscal, helped by the government's spending on infrastructure and rural housing, having endured a slowdown in FY25.

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