AAAR Tamil Nadu Holds GST Rate on Multi-Pack Pyjama Sets Determined Per Set, Not Per Pack, Under Notification No.1/2017-Central Tax (Rate)

The Appellate Authority for Advance Ruling (AAAR), Tamil Nadu, delivered its decision on the appeal filed by M/s. Link Up Textiles Pvt. Ltd., concerning the applicable GST rate on men’s pyjama sets packed in multi-packs for export. The appellant, engaged in exporting men’s pyjama sets (each set comprising a top and bottom), had sought an advance ruling regarding the correct HSN code and GST rate for two pyjama sets packed together in a single retail pack, where the total pack price exceeded Rs. 1,000.

The Authority for Advance Ruling (AAR) had previously ruled that the GST rate applicable for two pyjama sets packed in a single pack and costing less than Rs. 1,000 per piece or set would be 5% (2.5% CGST + 2.5% SGST) as per S.No.223 of Schedule I of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. Aggrieved by this, the appellant contended that the goods were marketed and sold as sets, and the rate threshold should apply per set, not per individual garment or per pack. They argued that since the effective per set value exceeded Rs. 1,000, the higher GST rate of 12% should apply.

During the personal hearing, the appellant’s representative agreed with the AAR’s ruling but sought clarification on whether the ruling would apply prospectively, expressing concern about potential refund liabilities for past exports where tax was paid at 12%.

In its detailed analysis, the AAAR examined the relevant notifications and the structure of the product. The Authority clarified that under Notification No.1/2017-Central Tax (Rate), the determination of the applicable GST rate is based on the sale value per piece, which, in the context of pyjama sets, refers to a single set comprising one top and one bottom. The Authority rejected the appellant’s argument that a multi-pack containing two sets should be treated as a single retail unit for GST rate determination. It held that even if multiple sets are packed together, each set remains an independent piece for the purpose of applying the rate threshold.

The AAAR found that the price of one pack containing two pyjama sets was Rs. 1,371, making the per set value Rs. 686, which is below the Rs. 1,000 threshold. Accordingly, the lower GST rate of 5% applies. The Authority also noted that subsequent changes to the notification (effective from 22.09.2025) increased the threshold to Rs. 2,500 per piece, but the principle of rate determination per set remains unchanged.

Concluding its reasoning, the AAAR upheld the AAR’s original ruling and dismissed the appeal, confirming that the GST rate for men’s pyjama sets packed in multi-packs is to be determined per set, not per pack, and that the lower rate applies where the per set value is below the prescribed threshold.