India’s General Sales Tax (GST) Council will consider a proposal to slash the tax on cement from 28 to 18 per cent at its meeting on 20 February, along with a ministerial panel report that proposes a reduction in rates in under-construction properties, including affordable homes, according to Indian newspaper The Telegraph.

However, the reduction of GST for cement to 18 per cent will represent a loss of INR130bn annually to the government.

The Narendra Modi-led government wants the GST reduction to benefit the end users in terms of lower prices as elections for the Lok Sabha, India’s Lower House of Parliament. are round the corner.

Analysts said cement currently accounts for around a fifth of construction costs and a 10 percentage point reduction in the tax burden will significantly help buyers, boost demand and increase revenue collection.