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Apparel & Footwear GST Cliff Calculator

See how the GST threshold on clothing, textiles and footwear changes your margin, and when a discount raises profit.

Reviewed by CA Apurav GargUpdated Calculated in your browser; copied links include your figures

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Calculator

Note:
Example values — replace with yours.

Price and discount

Discount as

Shown on the face of the invoice, so GST is on the price after the discount.

Costs per unit

Commission and fees as a share of the price the customer pays.

Your result

a unit at the customer price

₹1,178.75

At the customer price of ₹2,625.00 (5% slab), after GST, the platform fee, shipping and marketing. The discount costs ₹22.83 a unit against selling at the tag price.

5% up to
₹2,625.00
18% above
₹2,950.00
Dead zone ends at
₹2,970.38
Margin at each price
Per unitTag ₹2,999Customer ₹2,625Cap ₹2,625
GST slab18% slab5% slab5% slab
Net revenue (excl. GST)₹2,541.53₹2,500.00₹2,500.00
GST₹457.47₹125.00₹125.00
CM1 (after product cost)₹1,741.53₹1,700.00₹1,700.00
Platform fee₹149.95₹131.25₹131.25
CM2 (after shipping and fee)₹1,501.58₹1,478.75₹1,478.75
CM3 (after marketing)₹1,201.58₹1,178.75₹1,178.75

The cap is the highest price taxed at 5%. Between ₹2,625.00 and ₹2,950.00 the taxable value may fall either side of the threshold, so this tool applies 18% there and never under-collects GST.

What this tells you

Clothing, home textiles and footwear are taxed at 5% up to a taxable value of ₹2,500 a piece or pair, and at 18% on the full value above it. That makes some prices earn less than a lower price.

Enter your tag price, discount and costs to see your margin at the tag price, at the customer price and at the highest price in the lower slab, and where the dead zone ends.

Assumptions used

  • Prices include GST. In the grey zone the tool applies 18%, so it never shows less GST than may be due.
  • The discount is shown on the face of the invoice at the time of sale.
  • The platform fee is a percentage of the price the customer pays, including GST.
  • Product cost, shipping and marketing exclude GST. Input tax credit on them is not modelled.
  • Figures are rounded for display only; the working uses exact values.
Legal references and sources
Apparel & footwear GST threshold (taxable sale value per piece or pair)
Notification No. 9/2025–Central Tax (Rate) dated 17 September 2025, effective 22 September 2025 (Schedule I S. No. 388–392 and Schedule II S. No. 197–198, 202–206, covering Chapters 61, 62, 63 and 64).
Effective from 22 Sept 2025 · Last verified 27 Oct 2026
GST rate up to the threshold
Notification No. 9/2025–Central Tax (Rate) dated 17 September 2025, effective 22 September 2025 (Schedule I S. No. 388–392 and Schedule II S. No. 197–198, 202–206, covering Chapters 61, 62, 63 and 64).
Effective from 22 Sept 2025 · Last verified 2 Nov 2026
GST rate above the threshold (on the full value)
Notification No. 9/2025–Central Tax (Rate) dated 17 September 2025, effective 22 September 2025 (Schedule I S. No. 388–392 and Schedule II S. No. 197–198, 202–206, covering Chapters 61, 62, 63 and 64).
Effective from 22 Sept 2025 · Last verified 27 Oct 2026
Discount shown on the invoice
Section 15(3)(a), CGST Act, 2017 — a discount recorded on the face of the tax invoice at the time of supply is excluded from the taxable value.
Last verified 27 Oct 2026

How this is calculated

  1. Customer price = tag price − ₹ discount, or tag price × (1 − discount %).
  2. Cap = threshold × (1 + lower rate). The higher slab starts above threshold × (1 + higher rate).
  3. At or below the cap, GST is at the lower rate; above it (including the grey zone), at the higher rate.
  4. Net revenue = price ÷ (1 + rate); GST = price − net revenue; fee = fee % × price.
  5. CM1 = net revenue − product cost; CM2 = CM1 − shipping − fee; CM3 = CM2 − marketing.
  6. The dead zone ends at (threshold − fee % × cap) ÷ (1 ÷ (1 + higher rate) − fee %).

Terms used here

Worked examples

Example: a ₹2,999 kurta with ₹374 off

Cost ₹800, shipping ₹90, platform fee 5%, marketing ₹300. Cap ₹2,625.00; higher slab above ₹2,950.00.

  • At ₹2,999.00 (18%): Net revenue ₹2,541.53, GST ₹457.47, fee ₹149.95; CM1 ₹1,741.53, CM2 ₹1,501.58, CM3 ₹1,201.58.
  • At ₹2,625.00 (5%): Net revenue ₹2,500.00, GST ₹125.00, fee ₹131.25; CM1 ₹1,700.00, CM2 ₹1,478.75, CM3 ₹1,178.75.
  • The ₹374 discount lowers CM3 by only ₹22.83: GST falls by ₹332.47 and the fee by ₹18.70.
  • At ₹2,799.00 (grey zone, 18%): Net revenue ₹2,372.03, GST ₹426.97, fee ₹139.95; CM1 ₹1,572.03, CM2 ₹1,342.08, CM3 ₹1,042.08. That is ₹136.67 a unit less than pricing at ₹2,625.00.
  • The dead zone ends at ₹2,970.38.

Our GST & TDS Compliance service covers GST rates, invoicing and returns for ecommerce sellers.

Questions sellers ask

Why does a small price rise lower my margin?

The GST rate depends on the taxable value of each piece or pair. Once it crosses ₹2,500, the higher rate of 18% applies to the whole price, not only to the part above the threshold. A price just above the cap therefore loses more in GST than it gains in price.

What is the grey zone?

Between the highest price taxed at 5% and the lowest price that is clearly taxed at 18%, the taxable value is above the threshold if you take out GST at 5%, and at or below it if you take out GST at 18%. This tool applies 18% in that band, so it never shows less GST than may be due. How to treat a price in this band is a question to settle with your adviser before you use it.

What is the dead zone?

It runs from the cap up to the price at which the higher rate earns as much per unit as selling at the cap, after the platform fee. Any price inside it earns less than simply pricing at the cap.

Does a discount change the GST slab?

A discount recorded on the face of the tax invoice at the time of supply is excluded from the taxable value. So a discount shown on the invoice can bring the price into the lower slab. A discount given later, for example a coupon funded after the sale, may not.

Is the rate per order or per item?

Per piece or pair. A pack of several items is checked on each item’s value. This calculator works per unit.

Why is the platform fee on the price including GST?

Most platforms charge their commission on the price the customer pays. If yours charges on the price before GST, the fee here will be slightly higher than yours.

Want our team to look at these numbers alongside your books?

We keep books, file GST and TDS returns and prepare monthly MIS for D2C and marketplace sellers. Share your figures and we will walk you through what we find.

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Disclaimer

A planning estimate for general information only, based on the figures you enter and the GST settings shown. It is not professional or tax advice. Check the rate for your products before you set prices.

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