GST Rate on Multi-Pack Apparel: Appellate Authority Ruling AAAR/03/2026
The Appellate Authority ruled that GST rates for apparel are based on the price of an individual item, not the total pack value.
- Ruling
- Order-in-Appeal No. AAAR/ 03/2026 (AR) Dated: 09.03.2026
- Dated
- 09 Mar 2026
- Authority
- Appellate Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- The company asked if a two-set pack costing over Rs. 1,000 is taxed higher.
- The authority ruled that the 'piece' is the individual pyjama set.
- Since one set costs Rs. 686, it qualifies for the lower GST rate.
In short
The company asked the Appellate Authority for Advance Ruling (AAAR) whether a pack containing two pyjama sets should be taxed based on the total price of the pack or the price of each individual set. Because the total pack cost over Rs. 1,000 but each set cost less, the tax rate depended on how the government defines a 'piece' of apparel.
What has changed
How it worked before
Businesses were uncertain whether grouping multiple items into a single retail package would force the entire pack to be taxed at the higher rate applicable to goods over Rs. 1,000.
What has changed
The authority decided that a 'piece' refers to an individual, usable item of clothing. Even if you sell items in a multi-pack, you must look at the price of one single set to determine the GST rate. This means businesses can continue to use the lower tax rate for individual items that cost less than Rs. 1,000, even if they are sold together in a bundle.
Who this affects
Manufacturers and retailers of apparel who sell multi-packs of clothing items.
An example
Imagine a clothing brand sells a pack of three t-shirts for Rs. 1,200. Each individual t-shirt is priced at Rs. 400. Based on this ruling, the brand should apply the lower GST rate for items under Rs. 1,000, because the 'piece' value is Rs. 400, not the Rs. 1,200 pack price.
What you should do
This ruling only applies to the company that asked the question. If you sell similar multi-packs, you should consult with your tax advisor to see if this interpretation fits your specific product packaging and pricing structure. Do not assume this ruling automatically changes your tax liability.
If you do nothing
If you apply the wrong tax rate based on a misunderstanding of this ruling, you risk paying the incorrect amount of GST. Tax authorities may issue a notice for the difference in tax, along with interest and potential penalties. Always ensure your tax classification is supported by your own professional advice rather than relying on a ruling meant for another business.
The terms explained
- Appellate Authority for Advance Ruling
- A higher-level tax body that reviews and decides on appeals regarding previous tax rulings.
- GST rate
- The percentage of tax applied to the value of goods or services under the Goods and Services Tax system.
- Retail unit
- The final package or item as it is presented for sale to the end customer.
The ruling in detail
Appellate Authority for Advance Ruling
M/s. LINK UP TEXTILES PRIVATE LIMITED
Order-in-Appeal No. AAAR/ 03/2026 (AR) Dated: 09.03.2026 · Tamil Nadu
Questions before the authority
- What is the applicable GST rate on such men's Pyjama sets which are packed in 2 sets as per their buyers instruction and such packed Pyjama sets costs more than Rs. 1000
Facts
The appellant is engaged in exporting men's nightwear Pyjama sets, each consisting of a top and a bottom. They pack two such sets together in a single pack per buyer instructions, with the total price of the pack being Rs. 1,371. The appellant contended that the pack should be treated as a single retail unit, making the value per unit exceed Rs. 1,000 and thus subject to a higher GST rate.
Ruling
| Question | What the authority ruled |
|---|---|
| Applicable GST rate for 2-set pack | 5% (CGST-2.5% + SGST-2.5%) Classified under Schedule I, S.No. 223 of Notification No. 1/2017-Central Tax (Rate) as the value per set is less than Rs. 1,000 |
The Appellate Authority upheld the original ruling, determining that the 'piece' for tax classification refers to an individual pyjama set. Since the price of one pyjama set within the two-set pack is only Rs. 686, it falls below the Rs. 1,000 threshold. Consequently, the goods are subject to the lower GST rate applicable to items not exceeding Rs. 1,000.
Reasoning
The authority reasoned that the determination of tax is based on the 'cost per piece', and a 'piece' is defined as a single, independently usable apparel item. It rejected the appellant's argument that the entire two-set pack constitutes a single retail unit for valuation purposes. The ruling relied on the interpretation of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, which distinguishes tax rates based on whether the sale value per piece exceeds Rs. 1,000. It further noted that the price of one pyjama set is Rs. 686, which is below the threshold.
Provisions relied on
- Section 100(1) of the Tamil Nadu Goods & Services Tax Act 2017
- Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017
- Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025
For the practitioner
This ruling clarifies that for multi-pack apparel, the **tax threshold is applied to the individual unit** rather than the total pack value. It settles that packing multiple items together does not automatically convert them into a single 'piece' for GST valuation. Practitioners should note that this decision reinforces the **strict interpretation of 'per piece' valuation** for apparel under the relevant notifications.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/2026-04/link_up_textiles_pvt_ltd_aaar_order.pdf
Legibility of the scan, as read: high.
Prepared 12-10-2026.
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