AAAR Upholds 5% GST on Pyjama Sets; Value to be Determined Per Set, Not Per Multipack

The Appellant, M/s Link Up Textiles Private Limited, is engaged in exporting men’s pyjama sets comprising a shirt (kurta) and pants made primarily of cotton blends. These sets are packed in bundles of two sets per pack as per buyer requirements, with each pack priced at Rs. 1,371. The Appellant had sought an advance ruling regarding the applicable GST rate on such multi-pack pyjama sets. The Authority for Advance Ruling (AAR) held that GST at 5% applies where the sale value per piece does not exceed Rs. 1,000.

Aggrieved, the Appellant filed an appeal contending that the goods should be treated as a single retail unit (set or multi-pack), thereby attracting 12% GST since the value per pack exceeds Rs. 1,000. During the personal hearing, however, the Appellant accepted the AAR ruling and limited its concern to whether the ruling would operate prospectively, especially in light of prior exports made on payment of 12% IGST, and refund claimed thereon.

Central Issue: Whether the GST rate on men’s pyjama sets packed in multiple sets per pack should be determined based on the value of the entire pack or per individual pyjama set.

Tribunal’s Ruling: The Appellate Authority upheld the AAR ruling and dismissed the appeal, holding that GST must be determined per individual pyjama set and not per multipack. It clarified that a “piece” in terms of the applicable notification refers to a single pyjama set consisting of one shirt and one pair of pants. The Authority rejected the contention that packing multiple sets together converts them into a single retail unit. It held that even if multiple sets are bundled in one pack, each set retains its independent identity as a “piece” for valuation purposes.

Therefore, the total pack value must be divided to determine the per-set value. Since the value per pyjama set worked out to Rs. 686 (Rs. 1,371 ÷ 2), which is below Rs. 1,000, the goods fall under Schedule I and attract GST at 5%. The Authority further noted that the subsequent amendment increasing the threshold to Rs 2,500 per piece (effective 22.09.2025) continues to support classification at 5% GST. Thus, the appeal was dismissed, and the AAR ruling was affirmed.

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