The recent goods and services tax (GST) rationalisation is set to lift revenue growth of organised apparel retailers by about 200 bps this fiscal, keeping the topline steady at 13-14 per cent for the second financial year in a row, a report said on Monday.
The GST rate cut on apparel priced below Rs 2,500 is likely to lift demand in the mid-premium segment, while the fast fashion or value segment will continue to drive the momentum, Crisil Ratings said in a report.
Though limited, the GST relief provides timely support to sustain growth, the report stated.
The uniform 5 per cent GST rate — versus the previous dual structure of 5 per cent below Rs 1,000 and 12 per cent between Rs 1,000 and Rs 2,500 — has widened the consumption base, it added.
Conversely, Crisil Ratings said, the increase in the GST rate on apparel priced above Rs 2,500 from 12 per cent to 18 per cent has weighed on premium categories, including wedding wear, woollens, handlooms, and embroidered clothing.
The pre