top of page

GST 2.0 & Your Festive Wardrobe: Smart Shopping Tips for 2025

The festive season in India is as much about tradition and style as it is about savings. With GST 2.0 coming into effect from 22 September 2025, shoppers have a fresh opportunity to make their festive wardrobe purchases smarter, more affordable, and trend-savvy. Whether you're planning outfits for Diwali, Navratri, weddings or just festive gift giving, understanding the new GST reforms can help you pick brands, budget better, and avoid last-minute price shocks.

What is GST 2.0? Key Changes You Must Know

  • The GST Council has rationalized the slab structure: the earlier four tiers (5%, 12%, 18%, 28%) are being replaced by primarily two standard slabs — 5% and 18%, with a special 40% “de-merit/luxury/sin goods slab for high-end or socially sensitive goods.

  • Many essential and daily use items, personal care items, household items, packaged food etc. are moving to the 5% slab or becoming cheaper.

  • Clothes or garment items priced over ₹2,500 will now attract a higher GST rate (18%) instead of the earlier 12%.

  • There is a grace period for manufacturers/retailers with unsold stock: the government has allowed revision of MRP on unsold inventory and permitted the use of old packaging till December.

Implications for Your Festive Wardrobe.

These reforms will affect several aspects of how you choose, when you buy, and which brands to go for. Here are smart shopping tips given the new tax regime:

1. Time Your Buys Strategically

Since GST 2.0 reforms kick in from 22 September 2025, and many e-tailers will launch flagship sales immediately after (e.g. Amazon’s Great Indian Festival, Flipkart’s Big Billion Days) to capitalize on lowered taxes, this is a prime time to buy.

If you buy before that date, you might miss out on price reductions due to lower GST. Also, for items that will see GST increase (garments above ₹2,500 for instance), buying earlier could save money.


2. Watch the Price Brackets

  • Below ₹2,500 apparel: These are likely to remain in a lower tax bracket, making them more affordable.

  • Above ₹2,500: Expect 18% GST. So for premium brands or designer wear that has pricing above that threshold, the new tax might mean higher total cost.

So, for mid-range and premium fashion labels, this boundary is important.


3. Buy Essentials & Accessories Now

Many accessories (say belts, scarves), personal care (soaps, shampoos, toothpaste), and smaller items might see GST drop, so combining your festive outfit purchase with these smaller items (e.g. jewellery costume pieces, handbags under a certain budget) can give more value.


4. Prioritize Domestic & Mid-Tier Brands

Brands that can price a lot of items under the ₹2,500 threshold or that work in volumes will benefit more. Local / Indian brands that are positioned in affordable or mid-segment clothing may do better than ultra-luxury labels.


Which Brands Will Benefit & Which May Be Affected?

Here are examples of brands likely to see headwinds or tailwinds under GST 2.0:

Brands likely to benefit

Why?

These tend to offer more clothing in affordable price bands. GST cuts or stable rates below ₹2,500 will help them keep prices attractive.

Why?

For personal care, toiletries, daily-use products. GST reduction will improve margin or allow better discounts.

Consumer durable brands like LG, Samsung, Sony, Whirlpool

Why?

ACs, TVs etc. will be cheaper (GST down). Great time to buy electronics or pair outfits with matching accessories.

Car and auto brands (smaller/entry-level models) like Maruti Suzuki, Tata Motors, maybe electric vehicle makers

Why?

Lowered GST on small cars and auto components will help


Brands potentially affected / needing strategy adjustment.


Zara, Marks & Spencer (M&S), Levi’s, Diesel, premium/designer labels**

Why?

Many premium items priced over ₹2,500 will face higher GST (18%), which could increase final prices. They may need to adjust pricing or offer deeper promotions.


Ultra-luxury brands selling very high end (“super luxury”) items may also see reduced demand under the 40% rate slab.


Smart Shopping Tips: How to Maximise Savings

Here are practical tips to make the most of this reform in your wardrobe shopping:

  1. Always check price tags vs MRPs: After GST change, ensure retailers have updated prices downward (or upward where GST increased). For unsold stock, older MRP rules allowed revision; but always verify.

  2. Explore bundle deals or festival discounts: Retailers often bundle “buy 2 get 1 free” or gift cards during sale periods. Lower GST on many items gives retailers breathing room to offer such deals.

  3. Shop category-wise: If you need outfits + shoes + accessories + beauty items, prioritize categories with larger GST relief first (beauty/personal care, small accessories).

  4. Use loyalty programmes / coupons: Since margins will be under pressure, brands may offer extra incentives (coupons, cash-back) to maintain traffic.

  5. Watch out for premium purchases: For higher price items (designer sarees, luxury shoes, watches), the crossing of the ₹2,500 threshold (and possibly the luxury/slumded “sin/luxury” slab) means you’ll want to evaluate if the festive discount just offsets the tax increase or not.


What Retailers & Brands Should Do?

While this is more from the supply side, as someone buying or watching the market, it helps to know what to expect:

  • Brands will increase marketing around savings due to GST cut. Many consumer companies are upping marketing budgets 15-20% for the festive season.

  • E-commerce platforms like Amazon, Flipkart will time their sale events just after GST changes to get maximum traction.

  • Retailers need to manage inventory carefully, especially unsold stock, adjust MRPs or packaging as allowed.

Smart Festive Shopping in 2025

GST 2.0 represents one of the biggest reforms in India’s indirect tax structure in recent years. For you, the shopper, it means an opportunity:

  • Lower prices on many essentials and mid-range fashion & accessory items

  • The chance to buy high value items smartly (electronics, premium pieces) with improved deals

  • The need to be aware of thresholds (₹2,500 etc.) so you don’t get caught with unexpected higher taxes

For brands, it’s a moment to re-engineer pricing, promos, and product mixes to align with the new tax slabs. Those that adapt quickly stand to gain consumer trust and market share in this festive season.


Comments

bottom of page