The Retailers Association of India (RAI) welcomes the introduction of a cleaner two-slab GST framework, calling it a vital step towards simpler and fairer taxation. This reform is expected to:

- Lower consumer prices
- Stimulate demand and consumption
- Enhance the ease of doing business, particularly for retailers and MSMEs
- Support overall retail sector growth

Positive Developments
RAI appreciates the removal of the inverted duty structure across the textile value chain, which brings much-needed clarity, balance, and predictability to the industry.

Key Concerns Raised by RAI
Despite the positive changes, RAI has highlighted some concerns regarding specific categories and structural issues:

Structural Flaws in Price-Based GST Slabs
RAI strongly recommends moving to a flat GST rate across product categories rather than relying on price-based thresholds, which:

- Create distortions and promote grey market activity
- Lead to misreporting and compliance challenges
- Harm organised retail, especially for mid- and premium-priced products
- Discourage domestic manufacturing, undermining Make in India
- Create artificial barriers that force consumers to downgrade instead of expanding natural demand

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

- Hurt middle-class affordability
- Weaken the organised retail and garment sector
- Impact categories such as wedding apparel, winter wear, artisan-made, festive, and traditional products

RAI’s Recommendation: All garments and footwear should ideally be taxed at 5%, or at the very least, a more reasonable price threshold should be established.

Mobile Phones (Still Taxed at 18%)
RAI maintains that mobile phones are essential goods, not luxuries. Lowering GST from 18% to 5% would:

- Boost affordability
- Support the Digital India mission
- Expand access to digital tools for the broader population
- GST on Commercial Rentals

RAI has reiterated its long-standing demand to reduce GST on commercial rentals from 18% to 5% for retail outlets.
Key Concerns:

- Renting is merely the grant of the right to use immovable property, not a service or manufacturing activity
- Such properties are already subject to state levies like stamp duty, registration charges, and property tax
- Levying 18% GST results in blocked working capital
- It significantly impacts lakhs of small and medium retailers

RAI’s Recommendation: Reduce GST on commercial rentals to 5% to support retail viability and eliminate inverted duty structures across key categories.