Retailers Association of India urges govt to refrain from raising GST rates on consumer items
The proposed GST rate hike on apparel, footwear, handbags, cosmetics, watches, and other premium products could have significant repercussions on the formal retail sector and consumer sentiment. Such increases may jeopardize the formalization of trade, encouraging a shift toward unorganized markets
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Bengaluru: The Retailers Association of India (RAI) has urged the government to refrain from increasing GST (Goods & Services Tax) rates on consumer items as this move will have negative
impact on demand environment. “The proposed GST rate hike on apparel, footwear, handbags, cosmetics, watches, and other premium products could have significant repercussions on the formal retail sector and consumer sentiment. Such increases may jeopardize the formalization of trade, encouraging a shift toward unorganized markets,” the Retails Association of India said in a release.
“This move risks undermining the Government of India’s Make in India initiative, delaying the domestic growth of the retail sector and impacting employment opportunities,” it added. The association has urged that the upcoming Union Budget should take special measure to boost consumption. “To ensure the growth of the sector, the Union Budget for FY 25–26 should focus on generating demand and spurring consumption by offering benefits or concessions in the form of lower taxes. It will boost the overall consumer sentiment and benefit the retail sector. Consumption equals to Development. Tax benefits and relief to individual tax-payers will increase the monthly disposable income and support consumption,” the association said.
According to the association, the government has included retail and wholesale trades as MSMEs and they are allowed to be registered on Udyam Registration Portal. However, benefits to retail and wholesale trade MSMEs are restricted to Priority Sector Lending only. “We recommend that retail and wholesale traders should be eligible for all benefits available to other MSMEs,” the association said in the release.
The Retailers Association of India has urged the government the help small retailers adopt digital means for better business growth. “The first step to modernization is the use of Point of Sale Machines (also called as POS machines) as these help retailers in making bills for customers and also allow the owners of the stores to allow a non-family member to man the cash tills without the worry of embezzlement,” the association said.
