RAI suggests moving to flat GST rate across product categories instead of price-based thresholds

The Retailers Association of India (RAI) has recommended moving to a flat GST rate across product categories rather than relying on price-based thresholds.

RAI said that it create distortions and promote grey market activity and also lead to misreporting and compliance challenges.

“The price-based thresholds harm organised retail, especially for mid- and premium-priced products and discourage domestic manufacturing, undermining Make in India,” RAI said in a statement.


RAI said that GST reform is expected to lower consumer prices and enhance the ease of doing business, particularly for retailers and MSMEs.

The removal of the inverted duty structure across the textile value chain has brought much-needed clarity, balance, and predictability to the industry.

Placing garments and footwear above Rs 2,500 in the 18% GST slab could hurt middle-class affordability and weaken the organised retail and garment sector.

“It will also have an impact on categories such as wedding apparel, winter wear, artisan-made, festive, and traditional products,” RAI has said.

The association has recommended that all garments and footwear should ideally be taxed at 5%, or at the very least, a more reasonable price threshold should be established.

RAI has also demanded to reduce GST on commercial rentals from 18% to 5% for retail outlets.