With the GST rate hiked from 12 per cent to 18 per cent on apparel products priced above ₹2,500, brands are either not hiking prices or absorbing part of this hike in a bid to fuel consumer demand during the festival season. At the same time, they have reduced prices by 6.25-7 per cent on apparel products priced up to ₹2,500, which now attracts lower GST at 5 per cent from 12 per cent.
MD and CEO of Amar Jain Clothing, that owns brand Madame, told businessline that the company has passed on benefits of 7 per cent on clothing items that attract reduced 5 per cent GST rate. “We believe this will definitely provide impetus to demand traction during this festival season. For clothing items priced above ₹2,500, which make up 20 per cent of our portfolio, we have not increased prices despite increase in GST and are absorbing the impact. We want to offer more value for money to consumers through this measure during this festival season,” he added.
He said the company is bullish on the festival season. “On the first day of Navratri we saw higher demand compared to what we saw on the first day of Navratri last year, although the period has kickstarted earlier than last year,” he added.
The last two years have been challenging for the apparel segment after the pent-up demand seen post Covid and players are now banking on strong demand recovery this festival season.
MD, Aero Club, known for brands Woodland and Woods, said: “We have not hiked prices on products priced above ₹2,500 that is attracting a higher GST rate. We have a large portfolio priced in this price range. We are still contemplating on this matter and figuring out future steps. We don’t want to disrupt the strong demand momentum seen during this period as nearly 60 per cent of the sales for us come during this period. At the same time, we have passed on benefits of reduced GST to 5 per cent wherever applicable.”
Mixed impact
VP–EBOs at Libas, added: “GST 2.0 brings clarity and positivity for mass fashion, with garments under ₹2,500 now at 5 per cent —a big win for everyday wear. However, the shift of premium categories like lehengas and bridal wear to 18 per cent from 12 per cent brings challenges, especially during the festive and wedding season. This mixed impact is being felt across the retail apparel sector. We are passing on 100 per cent the GST benefit wherever rates have dropped, while also absorbing part of the hike in categories like lehengas to ensure customers continue to see value.”
A store manager of another key international brand told businessline that prices have not been hiked on products that are now attracting higher GST.
