Tax hikes target aspirational shoppers, say apparel makers

Apparel retailers and clothing associations said placing apparel and footwear in distinct slabs based on their prices may dent the sector's growth, which is already reeling from greater competition and high input costs.

- Suneera Tandon & Soumya Gupta

Apparel retailers and clothing associations said placing apparel and footwear in distinct slabs based on their prices may dent the sector's growth, which is already reeling from greater competition and high input costs. The move could impact more aspirational middle-income consumers who are increasingly buying into branded clothing.

Some retailers will pass on higher rates to consumers, while others are holding on until the festival season is over. GST Council increased GST on articles of apparel and clothing accessories with a sale value exceeding ₹2,500 per piece to the 18% tax slab from the earlier, lower 12%. This could impact the prices of denim, jackets, winter wear, and formal ethnic or wedding wear.