GST Rate Cut Likely: Here’s how Page Industries, Trent and peers could benefit

The government is considering a proposal to introduce a two-rate Goods and Services Tax (GST) structure for apparel and footwear in a move aimed at improving affordability and spurring consumption.Currently, apparel priced below ₹1,000 attracts a 5% GST, while items above that threshold are taxed at 12%. Under the new proposal, apparel above ₹1,000 is also likely to be taxed at 5%. In footwear, the GST rate on products below ₹1,000 is 12%, which could be reduced to 5%, while the 18% rate for footwear above ₹1,000 is expected to remain unchanged.

Analysts say the changes, if implemented, could materially impact consumption trends across fashion and footwear categories. According to Goldman Sachs, the revised GST structure would have varying implications for listed retail companies.

For Trent, around one-third of sales come from its Westside format, where a large portion of products retail above ₹1,000. The lower GST rate could therefore provide a significant boost to this segment.In the case of Page Industries, about 60% of sales are from innerwear priced below ₹1,000 and already taxed at lower rates. However, the company’s outerwear portfolio—roughly 40% of sales—retails above ₹1,000 and would benefit from the proposed shift from 12% to 5%.

For Bata, around 40% of sales are derived from footwear priced below ₹1,000, which stands to gain if the rate is cut to 5%. Meanwhile, Metro Brands, which generates more than 90% of sales from footwear priced above ₹1,000, is unlikely to see much benefit since the 18% GST rate on that category is expected to remain unchanged.

Also Read: GST Rate Cut Likely: Stocks that could be the potential beneficiaries of new reforms