Budget 2019: Clothes below Rs 2,000 may attract lower GST slab rate of 5%, down from the current 12%, if Finance Minister Nirmala Sitharaman heeds the suggestion pitched by Retailers Association of India.
Clothes below Rs 2,000 may attract lower GST slab rate of 5%, down from the current 12%, if Finance Minister Nirmala Sitharaman heeds the suggestion pitched by Retailers Association of India, a report said. “RAI suggested that the threshold for 5% tax slab on GST on apparels and clothing should be increased to Rs 2,000 per piece from the current Rs 1,000 per piece,” the CARE Ratings report said. For now, 12% GST is levied on all types of apparels and clothing which have a sale value exceeding Rs 1,000. Even though GST is not taken in Union Budget, the Finance Minister could make a statement of the government’s intent or a suggestion, which could then be taken up for review by the GST Council and Fitment Committee.
Among RAI’s other suggestions, the retail industry could benefit if the GST on branded and unbranded cereals and food grains is treated at par and declared tax free, the report said. Branded cereals and food grains attract a 5% tax under the GST regime currently. RAI has also said that the government should prioritize and introduce ‘Tax Refund for Tourists’ (TRT) scheme. Shopping is an important part of tourism and tourists should be encouraged to buy from Indian retail shops. “This is expected to not only boost tourism, but also consumption,” the report said.
Further, the Retailers Association of India has recommended that accepting digital payments should be made cheaper than cash for the retailers. This will help in promoting and strengthening digitization, RAI said. POS machines and high MDR rates are a major hindrance in adopting digital payments on a large scale. The Confederation of All India Traders (CAIT) had also said earlier that the government should incentivize digital payments to traders. Our demand is in line to fulfil Prime Minister Narendra Modi’s vision of a cashless economy, Praveen Khandelwal, General Secretary, Confederation of All India Traders (CAIT), had earlier told Financial Express Online.