While retailers and customers are still getting used to the GST regime experts say maximum retail price on garments is likely to dip by two to three per cent now. The GST has lower levies on various products in the garment value chain and this should impact final prices. Many textile players have adopted the ‘go slow’ method in manufacturing in the last few months due to uncertainty over GST. After the rates were fixed in June, manufacturers awaited its implementation from July 1, which created doubts among traders. Now, things are clearing up.
Discounts and sales are expected to reduce due to lower margins. Seasonal promotional efforts may however, continue but period of sale/EOSS will decline due to a fall in average top line and bottom line RMG makers. Given that input credit is granted under GST, and the contribution of garments below Rs 1,000 is at least twice that of more expensive ones, the average price decline in garments would be in the range of two to three per cent. The industry, meanwhile, is gearing up to pass on the benefit to consumers with proportionate reduction in the MRPs on new stocks next season.