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Fashion, lifestyle brands want a share of GST gains from stores chains

Indian and global manufacturers of fashion and lifestyle products have asked department store chains to pass on the benefits obtained from GST. The chains stand to save about 2 per cent due to the switchover to GST. Retailers have paid 15 per cent service tax on premises they rented out commercially since 2010. With GST implemented from July 1, a range of indirect taxes levied by the Centre and state governments, including service tax and value-added tax, have been subsumed into one levy. Rentals account for about 10 per cent to 15 per cent of a retailer’s costs.

With the introduction of GST, the tax on rental can be set off against input tax credits available for other goods and services. A certain margin is given when they buy goods from us, says the chief executive of a global brand. Everybody is pushing it hard. He says Shoppers Stop alone stands to save between Rs 30-50 crored a year.

 
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