Mumbai/ The Retailers Association of India (RAI) has welcomed the government’s introduction of a cleaner two-slab GST 2.0 framework, calling it a “significant step towards simpler and fairer taxation.”

According to RAI, this reform is expected to bring down consumer prices, stimulate demand and consumption, enhance ease of doing business—particularly for MSMEs and retailers—and support the overall growth of the retail sector.

Positive Development
RAI particularly appreciated the removal of the inverted duty structure across the textile value chain, stating that it will bring much-needed clarity, balance, and predictability to the industry.

Key Concerns Highlighted by RAI

Price-Based GST Slabs
RAI raised concerns over tax rates being linked to product price thresholds, arguing that this system:

• Creates distortions and encourages grey market activity

• Leads to misreporting and compliance hurdles

• Hurts organised retail, especially in mid- and premium-priced segments

• Discourages domestic manufacturing, undermining Make in India
  RAI has strongly recommended moving to a flat GST rate across categories.

Garments and Footwear Above ₹2,500
Placing these in the 18% slab could:

• Hurt middle-class affordability

• Weaken organised retail and the garment sector

• Impact segments like wedding apparel, winter wear, artisan-made, festive, and traditional products
  RAI suggests taxing all garments and footwear at 5%, or at least revising the price threshold to a more reasonable level.

Mobile Phones Still at 18% GST
RAI maintains that mobile phones are no longer luxuries but essential goods. Lowering GST from 18% to 5% would:

• Improve affordability

• Support the Digital India mission

• Expand access to digital tools for a wider population

Commercial Rentals at 18% GST
RAI reiterated its long-standing demand to reduce GST on commercial rentals for retail outlets from 18% to 5%. It highlighted that:

• Renting is only the grant of right to use immovable property, not a service or manufacturing activity

• Properties are already subject to state levies like stamp duty, registration charges, and property tax

• The 18% GST leads to blocked working capital

• It significantly impacts lakhs of small and medium retailers

RAI recommends reducing GST on rentals to 5% to ensure retail viability and eliminate structural distortions.

While RAI has welcomed GST 2.0 as a progressive reform, it has urged the government to revisit categories such as garments, footwear, mobile phones, and commercial rentals to ensure affordability for consumers and growth for organised retail