GST 2.0: Buyers pick value apparel, upgrade durables

THE POST-GST 2.0 shopping basket is a study in contrast.

- VIVEAT SUSAN PINTO

The tax cuts have boosted sales in the value segment led by apparel retail, but activated premiumisation in durables and beauty categories.

According to retailers and mall operators, since the goods and services tax (GST) cut, there has been a surge in sales of apparel priced below ₹2,500 after a two-year lull in demand.

The shift is showing up in the financial performance of companies. The Retailers Association of India (RAI), an apex body of retailers, has also corroborated this trend in its survey covering the August-October period where it noted that categories such as apparel, footwear as well as food and grocery saw a sharp uptick of about 9-12% in retail sales between September 22 and October 26 due to GST cuts.

“Value-led categories, including apparel under 2,500 and footwear in the 12% GST slab, saw steady growth. But apparel priced above ₹2,500, which moved from 12% to 18% GST slab, showed comparatively lower traction,” Kumar Rajagopalan, CEO, RAI, said.