Archive · 20 Nov 2025
GST Cuts Fail to Boost Apparel and Footwear Sales
The government reduced taxes on apparel and footwear to encourage people to buy more.
However, this didn't work as expected because people spent less due to early Diwali and bad weather.
Some companies saw sales drop, while others had steady demand.
The benefits of tax cuts varied depending on the price of the items.
GST rate cuts expected to boost consumption in apparel and footwear sectors
Early Diwali, weak discretionary spending, and erratic weather led to lackluster festive season
Uncertainty around GST rate rationalization led to delayed purchases
Footwear and apparel companies reported revenue declines
GST benefits varied across price bands, with mid-premium segment benefiting more
- Who
- Apparel and footwear retailers in India
- What
- Failed to see expected boost in sales after GST rate cuts
- When
- During the festive season, including Diwali
- Where
- India
- Why
- Due to early Diwali, weak discretionary spending, erratic weather, and uncertainty around GST rate changes
GST Benefited Certain Segments
GST Benefits Offset by Other Factors
GST Impact
GST Benefited Certain Segments
GST helped in certain price bands, benefiting mid-premium segment
GST Benefits Offset by Other Factors
Benefits offset by thinner discounts and no change in higher tax rates for expensive items
- GST rate change for footwear
- From 12% to 5% for footwear costing up to ₹2,500
- GST rate change for apparel
- Simplified to 5% and 18%, with price threshold for lower rate raised to ₹2,500
- Bata India Ltd revenue decline
- 4.2% year-on-year to ₹801.33 crore in the September quarter
- Khadim India Ltd sales
- Fell to ₹101 crore in the September quarter from ₹109 crore a year earlier
- Metro Brands growth
- Strong growth in e-commerce, optimistic about the second half
