Low-cost garments to become cheaper by 2-3% on low GST levy

However, discounts and freebies seen coming down under new tax regime due to squeeze in margins

The maximum retail price (MRP) on garments is likely to decline by 2-3 per cent with the rollout of new arrivals expected in a month, due to lower tax levy under the Goods and Services Tax (GST) than prevailing previously.

The GST council, in its meeting held last month, fixed the tax rate at 5 per cent on readymade garments priced at Rs 1,000 or less, and 12 per cent on those priced beyond, against the existing uniform central levy of 7 per cent. However, the tax rate works out to 18 per cent and 28 per cent on some machinery