CHENNAI: EVEN as discounts continued to be offered in apparel stores across the country, buyers fund to their dismay that actual rates have increased substantially after the implementation of GST.
According to officials at different stores including those like Levi’s, Arrow, US Polo, etc., discount offers like ‘Buy 2 and Get 2’ still exist, but taxation has increased.
“The discounts will remain till old stock is run out. but this is because of inventory issues and available input tax credit. Actual taxation post GST has increased rates right from July 1,” said a manager at a multi-national chain. Other chains concurred. An executive at an Arrow outlet said that with the computers updated and “we are now charging as per the new tax rate, which is more now.”
The reason why apparel is suddenly costlier under GST is because most textile manufacturing enjoyed a variety of tax exemptions, which made effective tax incidence nearly zero for many small businesses.
However, the GST has pegged tax for garments and apparels up to Rs 1,000, under the 5 per cent GST tax slab. Those items costing more than this will be taxed at 12 per cent.
The same rates are also being applied on other readymade apparel such as salwar kurtas, dresses, skirts, tops and jeans. Other natural fibres (except silk and jute) will be taxed at 5 percent and synthetic and manmade fibres will attract a higher tax of 18 per cent, effectively rendering most garments costlier.
[“Source-newindianexpress.”]