Festive offers on clothes, worked out
Tags include GST, one line of a bill each. “You give up” is the money the shop loses without GST, which is the real cost of the offer.
| Tag (GST included) | Offer | Price paid a piece | GST rate | GST on the line | Customer saves | You give up |
|---|---|---|---|---|---|---|
| Kurta ₹3,000 | 15% off | ₹2,550 | 18% → 5% | ₹457.63 → ₹121.43 | ₹450 | ₹113.80 |
| Silk saree ₹3,200 | 20% off | ₹2,560 | 18% → 5% | ₹488.14 → ₹121.90 | ₹640 | ₹273.76 |
| Lehenga choli ₹2,800 | 10% off | ₹2,520 | 18% → 5% | ₹427.12 → ₹120.00 | ₹280 | Nothing: you keep ₹27.12 more |
| Kurti set ₹2,700 | ₹100 off | ₹2,600 | 18% → 5% | ₹411.86 → ₹123.81 | ₹100 | Nothing: you keep ₹188.05 more |
| Jeans ₹2,999 | Buy 2, get 1 free | ₹1,999.33 (3 pieces for ₹5,998) | 18% → 5% | ₹1,372.42 → ₹285.62 | ₹2,999 | ₹1,912.20 |
| Sherwani ₹5,000 | 40% off | ₹3,000 | 18% | ₹762.71 → ₹457.63 | ₹2,000 | ₹1,694.92 |
| Shirt ₹1,499 | 30% off | ₹1,049.30 | 5% | ₹71.38 → ₹49.97 | ₹450 | ₹428.29 |
How GST works with a discount on clothes
- GST is charged after the discount, if the discount is given at the time of sale and written on the bill (CGST Act, Section 15(3)(a)).
- For clothes and footwear, the price after discount also picks the rate: one piece at ₹2,500 or less without GST is 5%, above is 18% (rates from 22 September 2025).
- It is per piece, not per bill. Five ₹999 shirts on one bill are still 5%; one ₹3,000 kurta is 18% until a discount brings that piece down.
- A discount on the whole bill is shared over the items by value (that is how the Tap & Bill app does it). ₹400 off a bill with a ₹3,000 kurta and a ₹1,000 shirt puts ₹300 on the kurta: it sells for ₹2,700 and stays at 18%, the shirt sells for ₹900 at 5%. If the offer is ₹400 off the kurta itself, it sells for ₹2,600 and is 5%. How you word an offer on the bill is a question for your CA.
- Buy one get one free is two items for one price, not a free gift (CBIC Circular 92/11/2019-GST). How the ₹2,500 limit applies to it is not settled; the checker and the app share the price over the pieces.
- A discount given later by credit note follows Section 15(3)(b) and does not change the bill you already made. Ask your CA.
Smallest discount that brings a tag to 5%
On a tag that includes GST, the piece is 5% once it sells for ₹2,625 or less (₹2,625 ÷ 1.05 = ₹2,500). Round the % up, not down: at 22.79% off a ₹3,400 tag the piece still sells for a few paise over ₹2,625.
| Tag (GST included) | Smallest discount | Sale price | GST before → after | You keep without GST, before → after |
|---|---|---|---|---|
| ₹2,700 | ₹75 (2.78%) | ₹2,625 | ₹411.86 → ₹125.00 | ₹2,288.14 → ₹2,500.00 |
| ₹2,799 | ₹174 (6.22%) | ₹2,625 | ₹426.97 → ₹125.00 | ₹2,372.03 → ₹2,500.00 |
| ₹2,999 | ₹374 (12.48%) | ₹2,625 | ₹457.47 → ₹125.00 | ₹2,541.53 → ₹2,500.00 |
| ₹3,200 | ₹575 (17.97%) | ₹2,625 | ₹488.14 → ₹125.00 | ₹2,711.86 → ₹2,500.00 |
| ₹3,499 | ₹874 (24.98%) | ₹2,625 | ₹533.75 → ₹125.00 | ₹2,965.25 → ₹2,500.00 |
| ₹3,999 | ₹1,374 (34.36%) | ₹2,625 | ₹610.02 → ₹125.00 | ₹3,388.98 → ₹2,500.00 |
| ₹4,999 | ₹2,374 (47.49%) | ₹2,625 | ₹762.56 → ₹125.00 | ₹4,236.44 → ₹2,500.00 |
Why a bigger discount can cost you less
Because the rate falls from 18% to 5% at ₹2,625, the money you keep does not fall in a straight line as the discount grows. One ₹3,000 tag:
| Discount | Customer pays | GST rate | You keep (without GST) |
|---|---|---|---|
| 0% | ₹3,000 | 18% | ₹2,542.37 |
| 5% | ₹2,850 | 18% * | ₹2,415.25 |
| 10% | ₹2,700 | 18% * | ₹2,288.14 |
| 12.5% | ₹2,625 | 5% | ₹2,500.00 |
| 15% | ₹2,550 | 5% | ₹2,428.57 |
| 20% | ₹2,400 | 5% | ₹2,285.71 |
| 25% | ₹2,250 | 5% | ₹2,142.86 |
At 12.5% off you keep more than at 5% or 10% off, and the customer pays less. The same thing happens to a ₹2,800 lehenga: with 10% off you keep ₹27.12 more than at full price. Price festive offers so the piece lands at ₹2,625 or below, or stays well above ₹2,950.
The ₹2,626 to ₹2,950 grey zone
With a tag that includes GST, a sale price from ₹2,626 to ₹2,950 is above ₹2,500 without GST at 5%, but below ₹2,500 at 18%. The Tap & Bill app charges 18% in this band, which also means you keep less than at ₹2,625. Ask your CA, and avoid sale prices in this band. More on the rule: GST on clothes: 5% or 18%?
On every bill, without a calculator
In the Tap & Bill app the cashier types the discount, or changes the rate after bargaining, and each line gets its rate from the price of one piece. The bill shows CGST and SGST per rate, and your CA gets a GST report. Staff can’t go below the lowest price you set for an item without your PIN (Mol-Bhav Guard), so a festive sale does not turn into a loss. Plans from ₹199 a month; 14-day free trial.