The new GST rates on clothes in India have been a welcomed reprieve to shoppers in different parts of the country because they have come into effect on September 22, 2025 . The relocation, which is meant to reduce the cost burden on consumers, is favorable to middle class right before the festive season.
In the new arrangement, the highest GST of garments that cost up to Rs2,500 will draw 5% of the amount, where previously, the 12% was charged on anything of or above Rs1,000. But in cases of clothes that cost more than Rs2500, the GST has been raised to 18%. This change has provided an interesting buy opportunity: in the event that the final cost of a product goes under Rs2,500 the lower GST rate of 5% is applied and the total bill is significantly reduced.
Say a shirt that was initially priced at Rs3,000 . At no discount, the amount will be paid inclusive of 18% GST Rs3,540. However, on a 20 % discount , it will cost Rs2,400. This is less than the Rs2,500 threshold hence only 5 percent GST is charged. The amount that is payable is reduced to Rs2,520. In effect, the buyer will be saving Rs1,020 over and above the non-discounted purchase which is a combination of lower product price (saving) and lower tax liability.
It should be mentioned that this advantage is limited to discounts that are displayed on the invoice itself. Offers after sales like bank cash back would also not affect the GST calculation because the tax is imposed on the amount invoiced.
This change according to the retail experts will turn out to be a game-changer when shopping during celebrations by the middle-class families . The buyers are now urged to be very mindful when they make their purchases and use the real in store or online discounts which reflect on the bill. In this way, they will not only have the benefits of lower prices but also a substantial savings on the taxes.
In the case of retailers as well, the shift provides them with a chance to develop attractive promotions that increase the quantity of goods that enter the 5 percent GST bracket and boost the sales volumes without imposing greater financial pressure on purchasers.
To put it briefly, the new GST framework is a win-win scenario : consumers will get better value, and companies will be able to anticipate a demand boom in the course of the festive rush.
Fuel Controversy: Outside GST Petrol and Diesel.
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Petrol and diesel are non-GST commodities that are high taxed.
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The present fuel prices are influenced by excise duty, VAT and dealer commission.
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Economists believe that GST would make things even and prices go down.
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There would be a GST cap of 28% which would make fuels cheap.
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Fuel taxes cause fear of loss of revenue by states.