India, Sept. 5 -- The real estate sector has welcomed the Goods and Services Tax (GST) Council's decision to slash tax rates on key construction materials, but industry experts say the relief will not translate into lower home prices.

At its meeting on Wednesday, the Council reduced GST on cement from 28% to 18% and on sand-lime bricks and stone inlay work from 12% to 5%. Cement, in particular, forms one of the largest cost components in housing projects.

While developers see the move as positive, analysts and industry bodies pointed out that the benefit for end-users would be negligible. With developers barred from availing GST input tax credits (ITC) on residential projects, the reduction will mostly shore up their margins rather than...