GST rate on readymade garments when purchase price was 2200 and selling rate is 3000

[BIJO SCARIA]

Hello,

From 22nd September, readymade garments valued less than Rs. 2,500 attract GST at 5%, and garments valued above Rs. 2,500 attract GST at 18%.

I have two doubts regarding this:

1. For the threshold value of Rs. 2,500, should this be considered inclusive of tax or exclusive of tax while determining the applicable GST rate?

2. If garments are purchased from a wholesaler at less than Rs. 2,500 (thus taxed at 5%), but later sold at more than Rs. 2,500, what GST rate should be charged at the time of retail sale?

AI Summary

Rs.2,500 GST Threshold Applies To Transaction Value Before Tax; Rate Depends On Each Supply's Transaction Value Under the amended rates effective 22 September, the Rs.2,500 threshold is applied to the transaction value exclusive of GST (i.e., the price before tax). GST for each supply is determined at the time of that supply: if a wholesaler sells below Rs.2,500 and charges 5%, that was correct for that supply; if a subsequent retail sale's transaction value exceeds Rs.2,500, the retailer must charge 18% on that retail supply. Input tax credit and invoicing follow regular GST rules based on the tax actually charged on each supply.