India, Sept. 4 -- Reduced GST on construction materials such as cement is expected to cut construction costs by 3-5%, offering real estate developers, particularly those in the affordable housing segment, relief in terms of cash flows and margins, say experts.

The new simplified GST structure replaces the earlier five-slab system with just two primary slabs of 5% and 18%, alongside a 40% rate for luxury and 'sin goods'.

This clarity in pricing is likely to strengthen consumer confidence, making the tax implications of homebuying easier to understand and encouraging more first-time buyers and fence-sitters to enter the market. The impact is expected to be especially strong in tier-II and tier-III cities. The reform will draw greater inst...