This document defines whether your professional goals have been met and reflects your worth in terms of an increment in your salary. 

In this blog, we will walk you through a salary increment letter, why it is important, a sample format for the letter and tips to craft a well-written letter. 

What is a Salary Increment Letter?

A salary increment letter is a formal document written by an employee asking for a raise in their current salary. The skeleton of this letter can be based on various factors such as the employee’s performance, achievements, undertaking additional responsibilities, and market conditions. 

The letter indicates and justifies the reason the employee is requesting a raise in their pay. You should focus on highlighting your contributions and accomplishments when writing a salary increment letter. Remember, this document is the best weapon in your arsenal for getting what you deserve at your workplace. 

Importance of Salary Increment Letter

A salary increment letter is important in both personal and professional development. Personally, the hike you will get will help you strengthen your finances. And professionally, it will help you in your career progression. 

Below listed points will help you understand the importance of a salary increment letter clearly: 

Formal Documentation

When you write a salary increment letter, you formally document your request for a raise. Your intention behind requesting a raise will be recorded, which in turn will lessen the chances of any misunderstandings in the future.

Justify your Value

A salary increment letter allows you to articulate and highlight your achievements. Not only that, it also showcases your contributions that have added value to the growth of the team and the organisation. 

Supports Career Growth

Requesting a salary increment in a structured manner can help you advance your career. It shows that you are proactive about your career development and are willing to advocate for yourself.

Motivates Performance

Sending a salary increment letter can be a motivating factor for both you and your employer. It provides a tangible goal to work towards and can lead to increased job satisfaction and engagement.

Salary Increment Letter Format

A salary increment letter should be well-crafted so that your request for an increase in salary doesn’t go unnoticed by your employer/manager. 

You can use the below format to write a salary increment letter:

[Your Name]

[Your Job Title]

[Department]

[Date]

Subject: Request for Salary Increment

Hi [Name], 

I hope this email/message finds you well. 

I am writing this email/message to formally request a raise in my current salary. With over [Enter Duration] years, I have contributed to [Company Name] in various roles and responsibilities.

I strongly believe that my performance and accomplishments will justify my request for the raise. 

Listed below are a few of my major accomplishments that contributed [Percentage] to the organisation’s growth: 

1. [Achievement 1]
2. [Achievement 2]
3. [Achievement 3]

An adjustment in my current compensation would boost my morale and help me contribute more towards the continued growth of the organisation. 

I am happy to discuss this further at your convenience. 

Awaiting your response. 

Yours sincerely 

[Name]

Salary Increment Letter Sample

Rahul Kumar

Brand Manager

Corporate Marketing

10/09/2024

Subject: Request for Salary Increment

Hi Priya, 

I hope this email finds you well. 

I am writing this email to formally request a raise in my current salary. For over 8 years, I have contributed to XYZ Corporation in various roles and responsibilities.

I strongly believe that my performance and accomplishments will justify my request for the raise. 

Listed below are a few of my major accomplishments that would help you derive a decision:

• Successful Implementation of Brand Campaign: Led the team with a strategic initiative for branding, resulting in an increase of 25% in brand awareness, and an 18% boost in engagement with the new market positioning of our product. 
• Product Launch: Collaborated with the product and project team to help deliver the new product launch that involved rigorous market research and a go-to-market strategy. 

An adjustment in my current compensation would boost my morale and help me contribute more towards the continued growth of the organisation. 

I am happy to discuss this further at your convenience. 

Awaiting your response. 

Yours sincerely 

Rahul Kumar

Tips to Write a Salary Increment Letter

Writing a good salary increment letter needs preparation and research. A well-curated salary increment letter has a higher chance of getting reviewed diligently. This increases the probability of getting a good increase. 

Here are a few tips to help you: 

1. Research the market and benchmark the current pay for your role across the industry. Understand the key responsibilities of the role and assess where you stand. 
2. Structure your increment letter. Use professional language and ensure to state the reason for writing the letter at the outset. 
3. Be specific about your accomplishments and try to use numbers, and figures as much as possible to highlight your contributions. 
4. Subtly highlight your value and showcase how you have been consistently meeting your goals. 
5. Proofread the salary increment letter before sending it to be sure that there are no errors in it.

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RTGS Charges 2024

The fees associated with RTGS transactions are called RTGS charges. As of 2024, the Reserve Bank of India (RBI) does not impose any processing fee for RTGS transfers but levies a service fee on the sender. The beneficiary is not required to pay any charges on inward transactions.

The current fee structure for RTGS transfers is as follows:

• For transaction amounts between Rs 2 lakh and INR 5 lakh, the service fee does not exceed Rs 24.50 plus taxes.
• For transaction amounts of Rs 5 lakh and above, the service fee does not exceed INR 49.50 plus taxes.

It’s worth noting that the RBI sets these maximum charges, and banks can charge lower fees than those mandated.

What Are the Applicable Fees for RTGS Transactions?

Here is the detailed breakdown of the applicable fees on RTGS transactions.

In addition to service fees, some banks may charge other fees, such as processing or convenience. These additional fees vary across banks and should be considered while making high-value transactions.

RTGS Charges For Top Indian Banks?

It is important to be aware of RTGS payment charges before initiating a transaction request. Here is a breakdown of RTGS charges for some of the top Indian banks:

HDFC Bank RTGS Charges

HDFC Bank does not levy any charges for online RTGS transactions, irrespective of the transaction amount. However, charges apply for branch-based RTGS transactions:

• A flat fee of Rs 15 plus GST is levied.

Axis Bank RTGS Charges

Like HDFC Bank, Axis Bank also does not levy charges for online RTGS transactions. However, for branch-based RTGS transactions:

• Transactions between Rs 2 lakh and Rs 5 lakh incur a fee of Rs 25 plus GST.

• Transactions above Rs 5 lakh attract a fee of ₹50 plus GST.

RBL Bank RTGS Charges

RBL Bank also does not charge any fees for online RTGS transactions. For transactions at branches:

• Transactions between Rs 2 lakh and Rs 5 lakh are subject to a fee of Rs 20 plus GST.

• Transactions above Rs 5 lakh incur a fee of Rs 40 plus GST.

ICICI Bank RTGS Charges

ICICI Bank offers free online RTGS transactions without any charges. However, for branch-based transactions:

• Transactions between Rs 2 lakh and Rs 5 lakh attract a fee of Rs 20 plus GST.
• Transactions above Rs 5 lakh have a fee of Rs 45 plus GST.

Why Choose RTGS for High-Value Fund Transfers?

RTGS is an ideal option for high-value fund transfers due to several reasons. Firstly, RTGS ensures real-time processing, meaning the funds are transferred instantly and settled in the recipient’s account within two hours. This makes it highly suitable for time-sensitive transactions, such as property deals or urgent payments.

Secondly, RTGS provides enhanced security features that protect the transfer of large sums of money. The payment system operates on a gross settlement basis, which means each transaction is settled individually without netting off against other transactions. This minimises the risk of fraud or unauthorised access to funds.

Lastly, RTGS is a reliable method for high-value transfers as it is facilitated by the Reserve Bank of India (RBI). The central bank oversees and regulates all RTGS transactions to ensure smooth and efficient processing.

Tips for Cost-Effective RTGS Transactions

To minimise RTGS fund transfer charges, consider the following tips:

• • Compare Fees: Different banks may have varying charges for RTGS transfers. Research and compare the fees offered by various banks to find a cost-effective option.
  • Transaction Amount: Some banks offer discounted or waived charges for higher transaction amounts. If possible, consolidate multiple smaller transfers into a single, larger transaction to take advantage of these benefits.
  • Timings: Check the RTGS timing restrictions imposed by your bank. Conducting RTGS transfers during non-peak hours or specific time slots may result in lower charges.
  • Preferred Banking Solutions: Some banks provide preferential pricing on their bundled banking solutions, which may include reduced charges or even free RTGS transactions.

Frequently Asked Questions

Is RTGS Transfer Free?

RTGS transfers are generally free for online transactions, but some banks may charge fees for branch-based transactions.

What Are The Charges For RTGS As Per RBI Guidelines?

The RBI sets maximum charges for RTGS: ₹24.50 + GST for transactions between Rs 2-5 lakh and ₹49.50 + GST for transactions above Rs 5 lakh. Banks can charge lower fees.

How Are RTGS Charges Calculated?

RTGS charges are generally calculated based on the slab system, where different slabs have different charges associated with them. For example, transferring up to ₹5 lakh may have a lower charge compared to transferring between ₹5 lakh and ₹10 lakh.

What Is The Charge Of RTGS In SBI?

The charges for RTGS in the State Bank of India (SBI) can vary depending on factors such as the amount being transferred and the type of account. It is recommended to refer to SBI’s official website or contact their customer support for the most accurate and up-to-date information on RTGS charges.

How do RTGS charges compare with fees associated with other electronic fund transfer methods?

RTGS charges tend to be higher than fees associated with other electronic fund transfer methods like NEFT (National Electronic Funds Transfer). However, RTGS offers real-time settlement and is suitable for high-value transactions requiring immediate funds transfer.

Can the timing of an RTGS transaction influence the applicable charges?

Some banks may offer lower charges for RTGS transactions done during non-peak hours.

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Leave encashment is the process of calculating and crediting the amount of cash in exchange for an employee’s unused paid leaves. Employees can save their leaves to receive money when they leave their job or retire. Leave encashment is included in the employee’s full and final settlement.

The leave encashment policy differs from company to company, and the rules vary. Some companies usually pay for the leaves taken, or some adjust them in the next calendar year. 

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Types of Leaves

To encash your leaves, you need to know the types of leaves, and which of them can be encashed. Here are different types of leaves:

Is Leave Encashment Taxable? 

Any leave is available for encashment during service, at retirement, or when a person resigns. When encashed during the service period, it is fully taxable and part of the salary income. However, one can claim some relief under Section 89 of the Income Tax Act.

Read more: Leave Management System

Leave Encashment During Employment

Leaves encashed while the employee is still employed are subject to taxation since the amount encashed becomes part of the “income from salary” head.

Tax benefits under Section 89 apply to this head, and employees can save tax by filling out Form 10E to claim tax relief.

Leave Encashment At Retirement or Resignation

Leave encashment can be received by the employees when they are still in employment, when they choose to retire, or when they resign. The leave encashment amount becomes part of the salary and is fully taxed if applied for when in employment. Section 89 of the Income Tax Act provides some tax relief. 

For government employees, both state and central, the entire amount is tax-exempted. However, for private employees, the leave encashment amount is partially taxable. The tax is calculated based on Section 10(10AA)(ii).

Leave Encashment for Legal Heirs of a Deceased Employee

Leave encashment for legal heirs of a deceased employee whether a government or a private employee, the amount is completely exempted from taxation. 

As per the latest tax norms introduced on 1 April 2023, a limit of ₹25 lakhs has been set. That means leave encashment amounts up to ₹25 lakhs will be exempted from tax for private employees. This will be valid provided they meet specified conditions mentioned under Section 10 of the Income Tax Act. 

For government employees, the taxation of leave encashment works differently than for non-government employees. 

Leave Encashment Formula

Leave encashment is calculated with a basic formula, i.e., 

[(Average Basic salary + Average Dearness Allowance) / 30] * No. of Earned Leaves

In the above formula, 

• Average Basic Salary = Average monthly basic salary 
• Average Dearness Allowance = Average monthly dearness allowance (DA)
• No. of Earned Leaves = Total number of leaves accumulated

Leave Encashment Calculation

The leave encashment calculation formula considers the per day salary of the employee, which is inclusive of the basic salary along with the Dearness Allowance (DA). This amount is then divided by 30 (assuming the month has 30 days). The number is then multiplied by the number of leaves accumulated by the employee to get the final result.

Here’s an example of leave encashment calculation to help you understand it better: 

Anil has been an employee of XYZ Corporation for 20 years and he was entitled to 35 days of annual leave. His monthly salary including the Dearness Allowance is ₹50,000. During his tenure at XYZ Corporation, he used only 120 days as leave and accumulated the remaining leaves. 

This is how his leave encashment will be calculated: 

Total leave entitlement over 20 years: 20 years X 35 days/year = 700 days 

Accumulated Leaves (Earned Leaves): 700 days−120 days=580 days

Per Day Salary: ₹50,000/30 = ₹1,666.67 

Leave Encashment Amount: ₹1,666.67×580=₹9,66,670

In this case, Anil’s leave encashment of ₹9,66,670 was higher than ₹3,00,000, so only ₹3,00,000 would be exempt from tax. The remaining amount, ₹6,66,670, would be taxable.

Leave Encashment for Legal Heirs of a Deceased Employee

Leave encashment for legal heirs of a deceased employee whether a government or a private employee, the amount is completely exempted from taxation. 

As per the latest tax norms introduced on 1 April 2023, a limit of ₹25 lakhs has been set. That means leave encashment amounts up to ₹25 lakhs will be exempted from tax for private employees. This will be valid provided they meet specified conditions mentioned under Section 10 of the Income Tax Act. 

For government employees, the taxation of leave encashment works differently than for non-government employees. 

What is Leave Encashment Policy?

Leave encashment is a policy wherein an employee is entitled to receive cash in exchange for their unused or unutilised leaves in a year. Employees can save their leaves and get the amount when they retire or when they resign. 

The leave accumulation policies of companies may vary from each other. However, generally, companies allow employees to carry over unused leaves from the current year to the next year. Employees can get paid for the unused leaves and can benefit from not using their leaves. 

However, the leave encashment amount is taxable with some exemptions. Government employees are exempted from tax when they retire and encash their unused leaves.

Process of Leave Encashment

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Highlights from 54th GST Council Meeting

As per the Press Information Bureau, here are the following key highlights from the 54th GST Council meeting on 09th September 2024.

Exemption for R&D Educational Institutions

GST Council recommended exempting the supply of research and development services by government entities or research associations, universities, colleges, or other institutions notified under section 35 of the Income Tax Act when using government or private grants.

Reduced GST Rates on Cancer Drugs

The Council recommended reducing GST rates on certain cancer drugs, including Trastuzumab Deruxtecan, Osimertinib, and Durvalumab, from 12% to 5%.

B2C E-Invoicing Pilot

GST Council has recommended implementation of e-invoicing for B2C transactions in a phased manner to prevent cases of false invoicing. This will allow customers to verify their invoices before reporting them while filing GST Returns. Until now, e-invoicing was applicable to B2B transactions for a registered person with a turnover of over Rs.5 crore

Enhancements to the New Invoice Management System

Post the introduction of Invoice Management System, the GST Council proposed other enhancements to the current GST return filing mechanism, such as a Reverse Charge Mechanism (RCM) ledger and an Input Tax Credit Reclaim ledger.

Status Report on Rate Rationalisation and Real Estate

The status reports were duly submitted by the Group of Ministers (GoM) formed on rate rationalisation and real estate, respectively, on the basis of which further discussions regarding the above two subjects will be held in upcoming council meetings.

No Changes to GST On Online Gaming

No changes were announced to GST on Online Gaming. Therefore, as decided in the 50th GST Council meeting held in October 2023, 28% of the GST stands applicable to casinos, games, and race courses.

The status was due to be reviewed after six months of the implementation. The current revenue from Online Gaming had increased by 412% in 6 months to Rs. 6,909 crores from Rs.1,349 crores before the notification was issued, whereas the revenue in case of casinos was increased by 30%, i.e., from Rs.164 crores to Rs. 214 crores.

GoM on Life and Health Insurance

The GST Council recommended the formation of a Group of Ministers (GoM) to study GST related to life and health insurance, which is an extension of the GoM on Rate Rationalisation. The newly formed GoM is required to submit the report by the end of October 2024. Therefore, the GST Council maintained the status quo by keeping the GST rate at 18% on life and health insurance and deferring it to the next meeting. The next GST Council Meeting will happen in November 2024.

Committee of Secretaries for IGST

A Committee of Secretaries under the chairmanship of the additional secretary revenue will be formed to explain and decide on the future of IGST and how to proceed with the same. Given a negative balance in IGST, retrieval process of the excess IGST passed on to some states will be studied. This report has to be submitted by the end of October 2024.

GoM on Compensation Cess

Finance Minister Nirmala Sitharaman stated that the total cess collected amounted to ₹8,66,706 crore. Additionally, she announced the formation of a Group of Ministers (GoM) to investigate and recommend a path forward for the compensation cess, which is scheduled to expire in March 2026. The GoM will study the feasibility of extending the cess or explore alternative funding mechanisms to support states impacted by the GST transition.

GST Rate Changes/Clarifications from 54th GST Council Meeting

54th GST Council Meeting Press Release Download

Download the 54th GST Council meeting press release issued by press information bureau after the conclusion of the meeting and press conference on 09th September 2024.

GST Rate Changes and Clarifications on Goods

1. GST on Namkeens and Extruded/Expanded Savoury Food Products

In the 54th GST Council meeting, the GST rate on namkeens, extruded, and expanded savory food items like bhujia was prospectively reduced from 18% to 12% except un-fried/un-cooked snack pellets).

2. GST Rate on Cancer Drugs

To make cancer treatment more affordable, the GST Council previously exempted the life-saving drug Dinutuximab (Qarziba), valued at Rs. 36 lakh, from GST. In their 54th meeting, the Council further reduced the GST rate on cancer drugs likeTrastuzumab Deruxtecan, Osimertinib, and Durvalumab from 12% to 5%.

3. RCM on Metal Scrap

A Reverse Charge Mechanism (RCM) will be introduced for the supply of metal scrap from unregistered suppliers to registered persons. The supplier must register when they exceed the threshold limit. The recipient, liable under RCM, will pay the tax even if the supplier is below the threshold. Additionally, a 2% Tax Deducted at Source (TDS) will apply to B2B supplies of metal scrap by registered persons.

Related Read: GST Rates on Steel and Iron Metal Scraps

4. GST on RMPU Air Conditioning Machines for Railways

Roof Mounted Package Unit (RMPU) Air Conditioning Machines for Railways will be classified under Harmonized System (HS) code 8415, subject to a 28% GST rate.

Related Read: GST Rate on Air Conditioners (AC)

5. GST Rate on Car and Motorcycle Seats

The GST rate on car seats under HS code 9401 will be increased from 18% to 28%. This uniform rate of 28% will apply prospectively to car seats of motor cars, aligning with the 28% GST rate for motorcycle seats.

GST Rate Changes and Clarifications on Services

1. GST on Life and Health Insurance Premiums

At present, the GST rate on life and health insurance premiums is 18%. During the 54th GST Council meeting, it was expected that the 18% GST rate would either be exempted or reduced to 5%. 

The 54th GST Council recommended the formation of a Group of Ministers (GoM) to comprehensively address GST-related issues concerning life and health insurance. The GoM members include Bihar, Uttar Pradesh, West Bengal, Karnataka, Kerala, Rajasthan, Andhra Pradesh, Meghalaya, Goa, Telangana, Tamil Nadu, Punjab, and Gujarat. The GoM is expected to submit its report by the end of October 2024.

2. GST on Transport of Passengers by Helicopters

The council has implemented a 5% GST rate on the transportation of passengers by helicopters on a seat-sharing basis and to retroactively regularize GST for past periods. Additionally, it’s clarified that chartering a helicopter will continue to be subject to an 18% GST rate.

3. GST on Flying Training Courses

In the 54th GST Council meeting, it was decided to issue a circular clarifying that approved flying training courses conducted by DGCA-approved Flying Training Organizations (FTOs) are exempt from GST.

4. GST on Supply of Research and Development Services

In August 2024, seven Indian educational institutions faced GST notices from the DGGI demanding ₹220 crore in unpaid taxes. Meanwhile, the 54th GST Council meeting exempted university R&D grants from GST.

5. GST on Payment Aggregators

Currently, payment aggregators enjoy a GST exemption for transactions under ₹2,000. This exemption was implemented in 2017 to encourage digital payments for smaller merchant transactions. The 54th GST Council meeting considered imposing an 18% GST on payment aggregators for income from transactions below ₹2,000. However, the decision was deferred and referred to the Fitment Committee for further review.

6. GST on Preferential Location Charges (PLC)

Preferential Location Charges (PLC) paid for construction services of residential, commercial, or industrial complexes before the issuance of a completion certificate are considered part of a composite supply. The main service in this case is the construction service, and PLC is naturally bundled with it. Therefore, PLC is eligible for the same GST treatment as the construction service.

7. GST on Affiliation services

Affiliation services provided by educational boards like CBSE are subject to GST. However, affiliation services offered by State/Central educational boards, educational councils, or similar entities to government schools will be exempt from GST prospectively. Past tax liabilities for the period between 01.07.2017 and 17.06.2021 will be regularized on an ‘as is where is’ basis.

A circular will be issued to clarify that affiliation services provided by universities to their constituent colleges are not covered under the exemptions granted to educational institutions in Notification No. 12/2017-CT(R) dated 28.06.2017. Therefore, these affiliation services are subject to an 18% GST rate.

8. GST on Import of service by branch Office

The GST Council recommended exempting the import of services by a foreign airline company’s establishment in India from a related person or any of its establishments outside India, when such imports are made without consideration. Additionally, the Council recommended regularizing past tax liabilities on an ‘as is where is’ basis.

9. RCM on Renting of commercial property

To prevent revenue leakage, the GST Council recommended bringing the renting of commercial property by unregistered persons to registered persons under the Reverse Charge Mechanism (RCM)

10. Ancillary/intermediate services are provided by GTA

To clarify that when ancillary/intermediate services like loading, unloading, packing, unpacking, transshipment, or temporary warehousing are provided by a Goods Transport Agency (GTA) during the transportation of goods by road and the GTA also issues a consignment note, these services will be considered part of a composite supply. However, if these services are not provided in the context of transportation and are invoiced separately, they will not be treated as part of the composite supply of transportation.

Related Read: Goods Transport Agency Under GST

54th GST Council Meeting in 2024: New Measures

B2C E-invoicing

• The GST Council recommended a pilot rollout of B2C e-invoicing, building on the successful implementation of B2B e-invoicing.
• The Council highlighted potential benefits for retail, such as increased efficiency, environmental friendliness, and cost savings.
• Retail customers would have the opportunity to verify invoice reporting in GST returns.
• The pilot will be voluntary and implemented in selected sectors and states.

Invoice Management System and New Ledgers

• The Council noted enhancements to the GST return architecture, including an RCM ledger, an Input Tax Credit Reclaim ledger, and an Invoice Management System (IMS).
• Taxpayers will have until October 31, 2024, to declare their opening balances for these ledgers.
• IMS will enable taxpayers to accept, reject, or hold invoices for input tax credit purposes.
• This optional feature aims to reduce input tax credit errors and improve reconciliation, potentially leading to fewer notices due to ITC mismatches in returns.

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Retargeting ads are like gentle nudges, reminding customers of the items they left behind. They help keep your brand in front of users who have already shown interest in your products, subtly encouraging them to complete their purchase. But the trick isn’t just in running retargeting ads; it’s about doing it right. Let’s explore how to effectively use retargeting ads to recover abandoned carts and boost your e-commerce conversions.

TL;DR

Retargeting ads are a powerful tool for recovering abandoned carts and boosting e-commerce conversions by reminding users of their interests and offering incentives. Key strategies include personalized ad creatives, dynamic retargeting, and multi-channel approaches. Avoid common mistakes like overloading users with ads, neglecting personalization, and inconsistent messaging. For even better results, integrate tools like Razorpay Magic Checkout to streamline the purchasing process. Measure success through metrics like cart abandonment recovery rate and ROAS to continuously optimize your campaigns.

Understanding Retargeting Ads and Their Importance in E-commerce

Retargeting ads are a smart marketing tactic that allows you to re-engage visitors who have interacted with your site but left without making a purchase. Ever notice how, after browsing for a pair of shoes online, you suddenly see ads for them everywhere—on Facebook, Instagram, or even while reading the news? That’s retargeting at work. It’s not magic; it’s a well-planned marketing strategy.

What is the First Step of Display Retargeting? 

The first step involves installing a tracking pixel or cookie on your website. This pixel helps in identifying visitors who leave your site without making a purchase. Once installed, this data enables you to serve targeted display ads to those visitors as they browse other websites, reminding them of their incomplete shopping journey and encouraging them to return and complete their purchase.

These ads work by using cookies or tracking pixels to follow visitors across the web and remind them of their incomplete shopping journey. The beauty of retargeting is that it reaches customers who are already familiar with your brand and products, making them much more likely to convert than first-time visitors. In fact, studies show that retargeted customers are 70% more likely to complete a purchase. For e-commerce businesses, this makes retargeting ads a crucial component of a comprehensive digital marketing strategy.

How Retargeting Ads Help in Recovering Abandoned Carts

Cart abandonment happens for many reasons—unexpected costs at checkout, complex payment processes, or even something as simple as distraction. But here’s where retargeting ads come in to save the day. By strategically targeting those who have abandoned their carts, you can address their concerns and nudge them back to complete their purchase. Here’s how retargeting ads can be used effectively, with retargeting ads examples for each approach:

Personalized Ad Creatives:

Personalization is key. Instead of showing a generic ad, imagine showing the exact products a customer left behind in their cart. For example, a shopper who left without purchasing a pair of blue sneakers sees an ad on Facebook that not only shows the same blue sneakers but also highlights customer reviews praising their comfort and style, along with a few complementary items like socks or shoe care kits.

• How to Implement: Use Facebook or Google Dynamic Product Ads to retarget users. Set up your ads to dynamically pull in specific product images, descriptions, and customer reviews based on the individual’s cart history. By reminding customers of their specific interests and showcasing social proof (like reviews), you significantly increase the likelihood of conversion.

Dynamic Retargeting Ads:

Dynamic retargeting takes personalization a step further by dynamically changing the content of the ad based on the user’s browsing behavior. Let’s say a shopper abandoned a cart containing a blue dress and red heels. The ad they see later on Instagram or Google Display Network features these exact items, paired with a “Complete the Look” suggestion that shows accessories that would complement these products.

• How to Implement: Platforms like Google Ads and Facebook offer dynamic retargeting tools. By linking your product catalog to your ads and setting rules based on user behavior (e.g., products added to the cart but not purchased), you can create ads that automatically display the specific items the customer viewed or added to their cart. This targeted approach jogs their memory and provides a direct path back to where they left off.

Incentives and Urgency:

Sometimes, a gentle push is all that’s needed. Ads that offer limited-time discounts, free shipping, or a buy-one-get-one deal can create a sense of urgency. For example, an ad might say, “You left something behind! Complete your purchase in the next 24 hours and get 15% off with code LASTCHANCE15.” The combination of a discount and a countdown clock creates a fear of missing out (FOMO), nudging customers to take action before the opportunity slips away.

• How to Implement: Create a series of retargeting ads that offer different levels of incentives based on user behavior. For those who have added items to their cart but haven’t completed the purchase, introduce time-sensitive offers in your ads using platforms like Facebook, Google, or even email. Use countdown timers in your ad creatives to visually reinforce urgency.

Sequential Retargeting:

Imagine a story told through a series of ads. The first ad reminds the customer of their abandoned cart with a subtle “Come Back to Complete Your Purchase” message. The second ad, a day or two later, might offer a small discount, saying, “We Miss You! Here’s 10% Off to Complete Your Order.” If the customer still hasn’t converted, a third ad could highlight the benefits of the products left behind, such as “See Why Customers Love Our Sustainable Yoga Mats—Limited Stock Available!” This progression gradually builds trust and reduces hesitation, increasing the chances of a completed purchase.

• How to Implement: Use tools like Facebook Ads Manager or Google Ads to create a retargeting funnel. Develop multiple ad sets that target users based on how recently they interacted with your site (e.g., 1-3 days ago, 4-7 days ago, 8-14 days ago). Craft unique ad creatives for each stage that builds on the last, moving from gentle reminders to incentives to showcasing product benefits.

Multi-Channel Retargeting:

Customers are everywhere—scrolling on Instagram, reading articles, or checking their email. A robust retargeting strategy reaches them across these different platforms, ensuring your brand stays top-of-mind and increasing the chances of cart recovery. For example, a customer who abandoned their cart might first see an Instagram ad highlighting their left-behind items. Later, while browsing an article on their favorite news site, a display ad reinforces the same message. Finally, an email lands in their inbox offering a small discount and free shipping to complete the purchase.

• How to Implement: Integrate your retargeting strategy across multiple platforms, such as Facebook, Instagram, Google Display Network, and email marketing tools like Mailchimp or Klaviyo. Ensure your messaging is consistent but adapted to fit the style and tone of each platform. For instance, Instagram might focus more on visually appealing ads, while emails can provide more detailed information and a clear call-to-action (CTA).
  

Integrating Magic Checkout to Minimize Cart Abandonment Further

Retargeting ads can only do so much if the checkout process remains clunky. Imagine a customer finally returning to your site, only to be met with a long, tedious checkout process. Chances are, they’ll abandon the cart—again. This is where Magic Checkout steps in.

Magic Checkout simplifies the process to a single click, pre-filling customer details and speeding up the entire experience. It’s like clearing the runway for a smooth landing. When used alongside effective retargeting ads, Magic Checkout helps seal the deal by eliminating the friction that often causes cart abandonment in the first place. For businesses that have implemented Magic Checkout, cart abandonment rates have dropped significantly, and conversion rates have soared.

Common Mistakes to Avoid in Retargeting Campaigns

1. Overloading Users with Ads
   
   Retargeting can be effective, but bombarding users with too many ads can lead to ad fatigue. When users see your ads too often, they might start to ignore them or even develop a negative perception of your brand. To avoid this, use frequency capping to limit how often your ads are shown to the same person and rotate your ad creatives regularly.
2. Neglecting Personalization
   
   Generic ads that don’t take into account the user’s browsing behavior or cart history are less likely to convert. Ensure your retargeting ads are personalized, displaying the exact products users showed interest in, along with relevant offers or incentives.
3. Poor Timing
   
   Timing is crucial in retargeting. If you wait too long to serve retargeting ads, the user might have already lost interest or made a purchase elsewhere. Implement a strategic timing approach, sending ads soon after cart abandonment and then following up with additional reminders if necessary.
4. Ignoring Mobile Optimization
   
   With a significant amount of browsing and shopping happening on mobile devices, your retargeting ads and landing pages must be mobile-friendly. Ensure that your ads are visually appealing on smaller screens and that the checkout process is streamlined for mobile users.
5. Inconsistent Messaging
   
   Inconsistent messaging between your ads and landing pages can confuse users and reduce trust. Ensure that the content of your ads aligns with the landing page experience. If your ad promises a discount or free shipping, make sure these offers are clearly visible and accessible when users click through.

Measuring the Success of Retargeting Campaigns

Setting up your retargeting campaigns is just the beginning. To truly harness the power of retargeting, it’s essential to measure its effectiveness meticulously. By tracking the right KPIs and conducting a thorough analysis, you can optimize your campaigns to reduce costs, increase conversions, and maximize ROI. Here’s a deep dive into the key metrics to focus on and how to approach optimization:

Cart Abandonment Recovery Rate

What It Is: This metric measures the percentage of abandoned carts that are recovered through retargeting efforts. If 100 users abandon their carts and 15 come back to complete their purchase after seeing a retargeting ad, your cart abandonment recovery rate is 15%.

Why It Matters: This metric directly shows the effectiveness of your retargeting campaigns. A higher recovery rate means your ads are successfully persuading potential customers to return and finalize their purchases.

How to Improve It: Analyze the content and timing of your ads. Are they compelling enough? Is there an incentive (like a discount or free shipping) that encourages customers to return? Test different creative formats—such as static images vs. carousel ads—and optimize based on performance data. Also, ensure that the post-click landing page (often the checkout page) is optimized for speed and simplicity.

Return on Ad Spend (ROAS)

What It Is: ROAS measures the revenue generated for every dollar spent on advertising. For example, if you spend $100 on retargeting ads and generate $500 in sales from them, your ROAS is 5:1.

Why It Matters: This metric provides a clear picture of how effectively your ad budget is being utilized. A higher ROAS means you are getting more value from your ad spend.

How to Improve It: Segment your audience based on their behavior (e.g., those who added items to the cart vs. those who merely viewed a product) and create tailored ads for each segment. Invest more in audiences that demonstrate higher purchase intent and less in low-performing segments. You can also use ROAS to adjust bidding strategies on platforms like Google Ads or Facebook Ads, focusing more on high-value customers.

Click-Through Rate (CTR)

What It Is: CTR measures the percentage of people who click on your ad after seeing it. If 1,000 people see your ad and 50 clicks on it, your CTR is 5%.

Why It Matters: CTR is a good indicator of how engaging your ad creatives are. A higher CTR generally implies that the ad content resonates well with your target audience.

How to Improve It: Experiment with different headlines, visuals, and CTAs (calls to action). A/B testing can help identify what types of messaging or imagery drive the most engagement. Make sure the ad copy is clear, concise, and directly addresses the pain points or desires of your audience. Using action-oriented language like “Shop Now,” “Grab Your Discount,” or “Don’t Miss Out” can also drive higher CTRs.

Conversion Rate

What It Is: This is the percentage of users who completed a desired action (like making a purchase) after clicking on your ad. If 50 people click on your ad and 10 make a purchase, your conversion rate is 20%.

Why It Matters: Conversion rate is the ultimate measure of success for any retargeting campaign. A high conversion rate means that your ads are not only engaging people but also convincing them to take the desired action.

How to Improve It: Ensure that the landing page experience aligns with the ad that led the user there. If your ad promises a 15% discount, make sure the landing page prominently displays this offer. Also, optimize the checkout process—consider tools like Magic Checkout to simplify the process to just a few clicks. You can also test different forms of social proof (such as customer reviews or testimonials) on landing pages to see if they help increase conversions.

Frequency and Ad Fatigue

What It Is: Frequency measures how often a single user sees your ad. High frequency can lead to ad fatigue, where users become annoyed by seeing the same ad repeatedly, which can lower CTR and conversion rates.

Why It Matters: Ad fatigue can negatively impact all other metrics—especially CTR and ROAS. If users are seeing your ad too often without converting, it could lead to banner blindness, where they start to ignore your ads altogether.

How to Improve It: Rotate ad creatives regularly to keep the content fresh. Use frequency capping settings on platforms like Facebook or Google to limit the number of times your ad is shown to the same person. Additionally, diversify your ad formats—combine image ads, video ads, carousel ads, and stories to provide a varied experience to the user.

Customer Lifetime Value (CLTV) from Retargeted Users

What It Is: This metric estimates the total revenue you can expect from a customer acquired through retargeting efforts over the entire period they remain a customer.

Why It Matters: While immediate sales are crucial, understanding the long-term value of retargeted customers can help you allocate your budget more effectively. If retargeted customers tend to have higher CLTV; it may justify a higher initial ad spend to acquire them.

How to Improve It: Beyond just retargeting for cart recovery, consider cross-selling and upselling through follow-up retargeting campaigns. For example, if a customer bought a pair of running shoes, a retargeting ad could promote complementary products like sports socks or gym gear. Engaging retargeted customers with loyalty programs or exclusive offers can also help boost CLTV.

Cost Per Acquisition (CPA)

What It Is: CPA measures how much it costs to acquire a customer through your retargeting efforts. If you spend $200 on retargeting ads and acquire 10 new customers, your CPA is $20.

Why It Matters: Keeping CPA low is vital for profitability. A high CPA can eat into your margins, especially if the average order value (AOV) is low.

How to Improve It: Focus on hyper-targeted ads that reach users who are most likely to convert. Utilize lookalike audiences based on your highest-value customers to find similar users who may be more cost-effective to convert. Regularly refine your bidding strategies to ensure you’re not overspending on low-performing ad placements.

A/B Testing and Continuous Optimization

Why It Matters: A/B testing helps you understand what works and what doesn’t in your retargeting campaigns. This process involves testing different versions of an ad (e.g., headlines, images, CTAs) to see which one performs better.

How to Implement: Set up A/B tests within your ad platforms. Start by testing one variable at a time (e.g., image vs. video), and use the data to refine your approach. Once you identify the best-performing elements, iterate, and test again. This cycle of testing, learning, and optimizing ensures that your retargeting ads remain effective over time.

Wrapping Up 

Cart abandonment is a hard truth, but it’s not the end of the story. Retargeting ads offer a powerful way to re-engage lost customers and bring them back to your store. When paired with a seamless checkout solution like Magic Checkout, you’re setting up your business for fewer abandoned carts and more completed purchases. It’s time to rethink your retargeting strategy and fine-tune that checkout process—your bottom line will thank you.

Get Started With Magic!

FAQs

1. What are retargeting ads?
   Retargeting ads are a form of online advertising that targets users who have previously interacted with your website but didn’t complete a purchase. These ads remind users of the products they viewed or left in their cart, encouraging them to return and finalize their purchase.
2. How do I set up retargeting ads for my e-commerce store?
   To set up retargeting ads, install a tracking pixel or cookie on your website to track visitor behavior. Use ad platforms like Google Ads or Facebook Ads to create retargeting campaigns, segment your audience based on their interactions, and design personalized ad creatives to re-engage them.
3. What are the best practices for retargeting ads?
   Best practices include personalizing ad content, using dynamic retargeting to show specific products, creating a sense of urgency with limited-time offers, and employing multi-channel retargeting to reach users across various platforms. Additionally, ensure ads are optimized for mobile and avoid overloading users with too many ads.
4. How can Magic Checkout help with retargeting efforts?
   Magic Checkout simplifies the purchasing process by pre-filling customer details and speeding up the checkout experience. When combined with effective retargeting ads, Magic Checkout helps reduce cart abandonment by providing a seamless and efficient checkout process, leading to higher conversion rates.
5. What metrics should I track to measure the success of my retargeting campaigns?
   Key metrics to track include cart abandonment recovery rate, return on ad spend (ROAS), click-through rate (CTR), conversion rate, frequency, and customer lifetime value (CLTV) from retargeted users. Monitoring these metrics helps evaluate the effectiveness of your campaigns and optimize for better results.

The post How to Use Retargeting Ads to Boost E-commerce Conversions appeared first on Razorpay Learn.

List of holidays as applicable in Karnataka, including Bangalore/Bengaluru, Mysore/Mysuru, Mangalore/Mangaluru, Hubli, Dharwad, Hubli, etc.

RazorpayX Payroll – India’s Only Fully Automated Payroll and HRMS

A payroll software designed to simplify payroll for employer and employee. Here’s a sneak peak into what RazorpayX Payroll can do for you.

• 40% cost reduction and 500+ hours saved – Doubtnut case study
• Reduce payroll and reimbursement timelines by 75% – Zo World case study 
• 90% of manual payroll tasks automated – Go Desi case study

Want to know more? Explore RazorpayX Payroll, or speak with our payroll experts.

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FAQs

The post Karnataka Holidays List – 2024 appeared first on Razorpay Learn.

List of holidays as applicable in Tamil Nadu, including Pooja holidays, Diwali holidays, Christmas and more, for Chennai, Coimbatore, Salem, Tiruchirapalli, Madurai.

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The penalty for not linking Aadhaar and PAN is Rs. 1,000 as a late fee if individuals link Aadhaar and PAN after May 31st, 2024. Furthermore, a penalty of higher TDS/TCS collection is also imposed on Individuals and entities who haven’t linked their Aadhaar and PAN cards.

If you already made the request to link Aadhaar and PAN card, you can check the Aadhaar and PAN card link status online

How to Pay the Penalty Before Linking Aadhaar Card and PAN Card?

As mentioned previously, a penalty fee must be paid on the e-filing portal for linking Aadhaar with PAN card after May 31st, 2024. Before submitting a link request, ensure you have paid the required penalty.

Here’s the step by step guide on how to pay the penalty fee to link Aadhaar Card and PAN card

STEP 1: Visit the Income Tax e-filing portal

Go to the official Income Tax Department website.

STEP 2: Click on ‘e-Pay Tax’

Click the “e-Pay Tax” link under the “Quick Links” section.

STEP 3: Enter PAN/TAN details

Enter your PAN number under PAN/TAN number, Confirm PAN/TAN number and enter your registered mobile number in the designated field.

STEP 4: OTP Verification

After OTP verification, you will be redirected to the e-Pay Tax page. Click the “Continue” button.

STEP 5: Click Proceed Button Under Income Tax

Click the “Proceed” button under the Income Tax tab.

STEP 6: Specify penalty details

• Assessment Year: Select the current financial year (e.g., 2024-25).
• Type of Payment (Minor Head): Choose ‘Other Receipts (500)’.
• Sub-type of Payment: Select ‘Fee for delay in linking PAN with Aadhaar’.

STEP 7: Make the Payment

The penalty amount will be automatically filled in under the ‘Others’ option. Click ‘Continue’ to proceed with payment.

A challan will be generated. Choose your preferred payment method: net banking, debit card, over-the-counter, NEFT/RTGS, or payment gateway.

Payment gateway options are available for select banks:

1. Axis Bank
2. Bank of Baroda
3. Bank of India
4. Bank of Maharashtra
5. Canara Bank
6. Central Bank of India
7. City Union Bank
8. Federal Bank
9. HDFC Bank
10. ICICI Bank
11. IDBI Bank
12. Indian Bank
13. Indian Overseas Bank
14. IndusInd Bank
15. Jammu & Kashmir Bank
16. Karur Vysya Bank
17. Kotak Mahindra Bank
18. Punjab & Sind Bank
19. Punjab National Bank
20. RBL Bank
21. South Indian Bank
22. State Bank of India
23. UCO Bank
24. Union Bank of India

After the payment process, proceed to link your Aadhaar and PAN card immediately.

Read More: What is a Payment Gateway and How Does it Work?

How to Link Aadhaar and PAN Card Online in 2024?

There are two methods to link your Aadhaar card and PAN card:

• Method 1: PAN Aadhaar link without logging in to your account
• Method 2: PAN Aadhaar link after logging in to your account

Method 1. How to Link Aadhaar and PAN Card Without Logging in to your Account?

STEP 1: Visit the Income Tax e-Filing Portal

Go to the official Income Tax Department website.

STEP 2: Locate “Link Aadhaar”

Look for the “Link Aadhaar” option under the Quick Links section on the left side of the homepage.

STEP 3: Enter PAN and Aadhaar Number to Validate

Enter your PAN and Aadhaar number accurately in the designated fields and click validate.

STEP 4: Enter Name and Mobile Number

Enter your name as per Aadhaar, registered mobile number and click link Aadhaar.

STEP 5: OTP Verification

An OTP will be sent to your registered mobile number. Enter the 6 digit OTP and click on validate button

STEP 6: Submission

Once the OTP is verified, your Aadhaar-PAN linking request will be submitted.

Method 2. How to Link Aadhaar and PAN Card After Logging in to your Account?

STEP 1: Go to Income Tax e-filing Portal > Log In

Visit the Income Tax e-filing Portal and click on the “Log In” button.

STEP 2: Log in to Income Tax e-Filing Portal

Enter your User ID as Aadhaar number/PAN number and click the “Continue” button.

STEP 3: Enter Your Password

Enter your password created during registration and click “Continue” button to access your profile. If you’ve forgotten your password, click the “Forgot password” link.

STEP 4: Navigate to Profile Section >  Link Aadhaar to PAN Option

Look for the “Profile” section on your dashboard. Under the “Profile” section, click on the “Link Aadhaar to PAN” option.

STEP 5: Enter Aadhaar Number

Enter your Aadhaar number accurately in the designated field.

STEP 6: Aadhaar to PAN Link Confirmation

A pop-up message will confirm successful Aadhaar linking to your PAN.

FAQs

1. What is the PAN Aadhaar link last date in 2024?

31st May 2024 is the last date to link Aadhaar and PAN card without penalty. However, still you can link with penalty fees.

2. What are the documents required to link Aadhaar and PAN card?

• Aadhaar Card
• PAN Card
• Registered mobile number linked to Aadhaar

3. How long does it take to link Aadhaar and PAN card?

Once you submit the request to link your Aadhaar with your PAN, it may take 7 to 30 days for the process to complete and your PAN card to be reactivated.

4. What if there is a mismatch in name between Aadhaar card and PAN card?

If there’s a name mismatch between your Aadhaar and PAN cards, linking them might be problematic. It’s advisable to correct any discrepancies in your Aadhaar card before proceeding.

5. Can I link multiple Aadhaar cards to one PAN card?

As per Indian law, each individual is entitled to only one PAN card and one Aadhaar number, both of which must be unique. Therefore, linking multiple PAN cards to a single Aadhaar number is prohibited.

6. Is PAN Aadhaar link free?

No, linking PAN and Aadhaar is not free. There was a deadline of 30th June 2023 to link them without a penalty, but that has passed. Now, you need to pay a penalty of Rs. 1,000 to link your PAN and Aadhaar.

7. How to check PAN-Aadhaar link status via SMS?

To check your PAN-Aadhaar link status via SMS, follow these steps:

• Compose a new SMS: Type “UIDPAN <12-digit Aadhaar number> <10-digit PAN number>” (without quotes).
• Send the SMS: Send this message to either 567678 or 56161.
• Wait for the response: You will receive an SMS indicating whether your Aadhaar is linked to your PAN.

8. Who is exempt from the PAN Aadhaar link?

Individuals residing in Jammu and Kashmir, Assam, or Meghalaya; non-resident taxable persons as per the Income Tax Act, 1961; and individuals aged 80 years or older (super senior citizens).

9. What is the alternate way to link Aadhaar to PAN card?

You can link your Aadhar and PAN cards using SMS. Simply send a text message with this format: “UIDPAN [your 12-digit Aadhar number] [your 10-character PAN number]” to the number provided by the Income Tax Department. You’ll get a confirmation message once the linking is done.

10. Who needs to link Aadhaar and PAN card?

If you have a PAN card and were assigned one on or before July 1, 2017, and you have an Aadhaar number, you need to link your Aadhaar to your PAN. This is required by law for everyone who meets these conditions.

The post PAN Aadhaar Link: How to Link Aadhaar and PAN Card Online After Deadline? appeared first on Razorpay Learn.

GST on Clothes priced below Rs. 1,000 are exempt from GST, while those priced at Rs. 1,000 or more attract a 5% GST rate.

Ready-made garments are taxed at 12% GST, and synthetic or man-made fibers and fabrics face an 18% GST rate.

The standard GST rate for textile products is 12%, while 5% GST is applied if the cost of apparel and footwear is less than Rs.1,000.

For raw cotton, buyers must pay GST on a reverse charge basis at 5%, meaning the GST is paid directly by the receiver instead of the supplier. In contrast, raw jute and raw silk are exempt from GST, so dealers and mills handling these materials do not need to register under GST or pay taxes.

Related Read: GST Rates in 2024: Check Full List of Goods and Service Tax Rates, Slabs & Revisions

GST Rate on Clothes and Apparels

In accordance with CBIC GST Rates, we have listed the GST rates for clothing.

GST Rate on Textile Materials

All sorts of clothes and apparel with a market cost higher than Rs. 1000 are subject to a 12% GST Rate. The standard GST rate for textile products is 12%, while 5% GST is applied if the cost of apparel and footwear is less than ₹1,000.

Tailoring services and renting of clothes are subject to a GST rate of 5% under HSN code 9988.

Additionally, the composition scheme is available for businesses supplying clothes, provided their annual turnover does not exceed Rs. 1.5 crore (or Rs. 75 lakhs in north-eastern states). For businesses involved in cloth renting or stitching services, the turnover limit for the composition scheme is Rs. 50 lakhs.

Recent Updates Of GST Regulations For The Clothing Industry In 2024

During the interim budget of 2024, the Apparel Export Promotion Council (AEPC) proposed several changes to the GST structure for the textile industry. The council requested tax incentives, including uniform GST rates and increased interest subsidies, to support domestic manufacturing and boost India’s exports.

AEPC called for tax concessions for apparel manufacturers who adhere to international quality standards and Environmental, Social, and Corporate Governance (ESG) compliance. They also sought budgetary support for branding and marketing Indian products.

The council noted that interest equalisation rates under the interest equalisation scheme were reduced from 3% to 2% for non-MSMEs. AEPC requested that the government increase these rates to 5% for all apparel exporters.

Additionally, AEPC suggested that trimmings and embellishments be included under the Import of Goods at Concessional Rates (IGCR) duty rules. Exporters are often required to use pre-approved trimmings and embellishments from overseas suppliers nominated by garment buyers.

However, no changes have been made yet in the GST structure for clothing in 2024. 

Recent GST Update: All About 53rd GST Council Meeting

Conclusion

It’s crucial for clothing businesses to keep up with GST rules to stay compliant and competitive. There have been no changes in the GST structure in clothing since 2022 however businesses must stay updated as these GST changes affect finances and operations.

By seeking advice when needed and following compliance rules, businesses can avoid penalties and manage taxes effectively. This proactive approach helps ensure steady growth and adaptability in an ever-changing regulatory landscape, setting them up for success in the clothing industry.

Also Read: 

• GST Rate on Insurance Premium
• GST Rate on Rent
• GST Rate on AC

Frequently Asked Questions

1. What Is The GST Percentage On Clothes In India?

Ready-made garments priced up to ₹1000 are taxed at 5%, while those priced above ₹1000 incur a GST of 12%.

2. Are Clothes Subject To GST?

The sale of clothes, whether stitched or unstitched, is taxable under GST as it falls within the scope of supply.

3. What Are The GST Rates On Garments?

The rate of GST on stitched and readymade clothes is 5%.

4. What Is The GST Rate For Tailoring Services?

Tailoring services are subject to a GST rate of 5% which has been reduced from 18% under HSN code 9988.

5. Which Clothing Items Are Exempt From GST?

Raw jute and raw silk are exempt from GST, meaning dealers or mills handling these materials do not need to register under GST or pay taxes. Additionally, certain wool products also fall under this exemption from GST.

6. How Does GST Impact The Pricing Of Clothes?

Clothes priced below Rs. 1,000 are exempt from GST, while those priced at Rs. 1,000 or more attract a 5% GST rate. Ready-made garments are taxed at 12% GST, and synthetic or man-made fibers and fabrics face an 18% GST rate.

7. Are There Any Penalties For Non-Compliance With GST Regulations On Clothes?

Failure to generate an E-Invoice or issue a valid tax invoice for GST can lead to penalties. Businesses may face a penalty amounting to either 100% of the tax due or INR 10,000, whichever is greater, for each instance of non-compliance.

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