2026 (3) TMI 1196 - AAAR - GST

Per piece valuation: multi-pack apparel taxed by sale value per independently usable set, yielding the lower GST rate.

Each pyjama set (one top and one bottom) constitutes a 'piece' for application of the notified GST schedules; a multi-pack containing two such sets is not ... Determination of GST rate by sale value per piece - classification of a pyjama set as a single piece - Benefit of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025). Whether two pyjama sets packed in one pack constitute a single retail unit for the purpose of applying the lower GST rate or whether the GST rate is to be determined by the sale value per piece where one 'piece' is a pyjama set (top and bottom sold together). - HELD THAT:- The Authority held that a 'pyjama set' (a top and a bottom sold together) constitutes a single piece for classification under the Notification. A pack containing two such sets therefore comprises two pieces and cannot be treated as one piece or a single retail unit merely because both sets are packed together. Consequently, the applicable rate is determined by the sale value per piece; the pack price must be apportioned to obtain the per-piece sale value. Applying that approach to the facts, the per-piece price falls below the threshold in the relevant Notification and the lower rate applies. The Authority also noted the subsequent amendment raising the threshold effective from 22.09.2025, which is consistent with the same per-piece approach adopted here. [Paras 7, 8] A pyjama set (top and bottom) is a single piece; a pack of two sets equals two pieces and the GST rate is assessed by sale value per piece, resulting in qualification for the lower rate. Final Conclusion: The AAR's ruling is upheld and the appeal is dismissed: the pyjama set is to be treated as one piece and the GST rate is determined per piece, yielding the lower rate on the facts before the Authority. Issues: Whether the applicable GST rate on two men's pyjama sets packed in a single pack must be determined per pack (treating the multi-pack as a single retail unit) or per piece/set (treating each pyjama set as a separate piece for the purpose of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025).Analysis: The Appellate Authority examined the nature of the product (a pyjama set consisting of one top and one bottom), the packing (two such sets in a single pack per buyer instruction), the language of the relevant notifications and schedules which prescribe rates based on sale value 'per piece', and the ordinary meaning and commercial understanding of 'pyjama set' as a piece comprising top and bottom. The Authority considered whether a multi-pack containing multiple sets should be treated as a single retail unit for rate threshold purposes and observed that a pack containing multiple sets does not necessarily become a single retail unit; the relevant determination under the Notifications is the sale value per piece, where a piece is an independently usable apparel (here, one pyjama set). The Authority applied the notified schedules (Schedule I and Schedule II of Notification No. 1/2017 and the amended thresholds in Notification No. 9/2025) to the facts: the pack price of Rs. 1,371 represents two pieces (two pyjama sets), producing a per-piece price below the notified threshold, and therefore falling within the lower rate entry.Conclusion: The Appellate Authority upheld the AAR ruling that each pyjama set (one top and one bottom) is a 'piece' for the purposes of the Notifications; since the effective sale value per piece is Rs. 686 (less than the notified threshold), the transaction is liable to GST at 5% (CGST 2.5% + SGST 2.5%) and the appeal is dismissed.