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- GST, weak demand, falling exports continue to hound branded apparel makers
Branded apparel manufacturers and retailers are yet to overcome the implications of the goods and services tax (GST) rollout in July. The tax reform had directly impacted the entire textile chain due to cascading burden. And post GST, poor consumer sentiment and falling exports have only made matters worse for the business. The September quarter results of large players stand testimony to this and experts don't see better days on the horizon for them. Branded apparels priced at Rs 1,000 or above attract 12 per cent GST, while those below this threshold suffer 5 per cent. With this levy, retailers have seen consumers shift towards low-priced apparels. Established players who've had to comply with new tax mechanism don’t deal in cash to avoid the levy. Besides, branded apparel firms had to buy back their inventory from bulk consumers ahead of the effective date of GST implementation, July 1, to avoid high tax levy on the apparels they had bought by paying less tax earlier. This has already resulted in some additional stock lying with them.
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