Even as garments above Rs 1,000 per piece will attract a 12% tax rate as the Goods and Services Tax (GST) is rolled out from July 1, shoppers need not fret as, in the long run, there will be only a "little impact" on the pricing, say industry experts.
"Yes (the prices will go up), as the garments above Rs 1,000 will attract 12% tax compared to the 5% that it used to attract earlier. At the same time, there is a relief of input tax that we can avail," says Pankaj Anand, Director and Co-Founder at Sabhyata, an ethnic clothing brand.
The slabs set as part of the GST -- the country's biggest indirect tax reform -- has sparked several doubts in the minds of businessmen as well as consumers. The single pan-India GST has replaced the existing myriad central and state levies on both goods and services.
"The GST induction is just a transitory phase with little impact on pricing in the longer run. So, future prospects of the sector are very bright. With better economic growth and the consequent increase in the purchasing power of Indian middle class, the sector looks very promising," Anand added.
Benu Sehgal, Head of Retail and Marketing for Ambience Malls, said, "Fashion will not get affected that much. In a year or two, the sector will get more organised at the root level or raw materials level. As of now, we are only organised at the end level (sales)."
According to Abhishek Bansal, Executive Director, Pacific India Group (Pacific Malls), the new tax system will lead to changes in the industry for sure. "Fast fashion will be the way forward. Brands will be providing more product lines and the latest in trends at shorter intervals. In fact, value and volume will both become key drivers for the segment," he said.