During Diwali, Sales of Ethnic and Festive Wear Suffered Due to Changed, Higher GST

New Delhi: The real impact of the Goods and Services Tax (GST) reforms introduced earlier this year was seen this Diwali. With readymade garments priced above Rs. 2,500 attracting 18% GST, the sales of ethnic and festive wear saw a 15% drop during the festival season, according to a report in The Hindu.

Branded garments priced above Rs. 1,000 earlier attracted 12% GST. Branded Indian garments, typically priced between Rs. 2,500 and Rs. 7,000, bore the brunt with the changed GST at 18%.

“Our estimate is ethnic wear and festive wear showed a decline of 15%. Sale of branded garments priced above Rs. 2,500 saw a 5-7% drop. However, products below Rs. 2,500 saw a growth of 7-8% over last Diwali,” Rahul Mehta, chief mentor of the Clothing Manufacturers Association of India (CMAI), is quoted as saying by The Hindu.

The GST slabs are different for different apparels. For example, a saree priced Rs. 1 lakh attracts only 5% duty as it is classified under “textiles”, while a salwar set priced more than Rs. 2,500 attracts 18% duty as a readymade garment. “There will be a certain shift to garments less than Rs. 2,500,” Mehta is quoted as saying by The Hindu. The association has urged a uniform 5% levy for all garments.

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