India GST Apparel Tax Rationalisation

India's Goods and Services Tax (India) Council, chaired by Nirmala Sitharaman, rationalised the Goods and Services Tax (India) structure for the organised apparel retail sector. Apparel priced below Rs 2,500 now has a uniform 5% GST, replacing a dual structure of 5% and 12%. Apparel above Rs 2,500 saw an increase from 12% to 18%. Additionally, GST on synthetic fibres and yarn was reduced to a uniform 5%. S&P Global — CRISIL Ratings, through its senior directors Anuj Sethi and Poonam Upadhyay, projects this will add 200 basis points to the sector's revenue growth, keeping it steady at 13-14% for the second consecutive year. The changes are expected to stimulate demand in the fast-fashion, value, and mid-premium segments, which account for 65% of the sector's revenue. While the premium segment may see softened demand, lower input costs from reduced GST on raw materials are expected to improve operating margins for retailers.