India has been gearing up for July 1st ever since the buzz around the biggest tax reform –Goods & Service Tax (GST) – knocked the doors to change the financial face of the country’s economy. With just 12 hours left, GST will get implemented officially post midnight today. Apparel brands, which operate in India, foresee a better future for themselves once GST kicks in.
It’s worth recalling here that according to revised tax slabs in GST, apparels under Rs. 1,000 have been reduced to 5 per cent while apparels over Rs. 1,000 have been kept at 12 per cent. In the same context, speaking to Apparel Resources, Ravi Mehra, Managing Partner, POUR FEMME – Indian leading brand of women’s western outfits – opines, “Branded players in India are most likely to gain benefits in forthcoming years as GST will allow them to actually be much more competitive with the input tax credits.”
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According to POUR FEMME, the brands that have a larger distribution network and a major chunk in the Indian market will see slightly more profitable businesses than MSME’s from GST. Additionally, to keep MSME’s benefitted from GST, the whole cycle of taxation is designed by the Government in a way that even if the local markets and retailers get the supply from big manufacturing players, they would not get impacted negatively with this.
“We are set to welcome this new policy irrespective of its implementation challenges as we can visualize a clear advantages of this tax scheme which scraps all excise duties, octroi and transport tax levied on apparels to club it in one SINGLE tax in this revolutionary step taken by the Government,” concludes Ravi.
