Shares of Ethos, a leading retailer of luxury watches, are likely to be in focus today following news of a proposal by the Group of Ministers (GoM) on GST rate rationalization to hike tax rates on high-end items such as watches, cosmetics, and shoes. This move is part of a broader effort to transition India’s indirect tax regime towards taxing products based on their pricing, thereby imposing a greater tax burden on luxury and premium goods.
The GoM’s recommendation, if approved during the GST Council meeting on December 21, could increase the GST rates for these products beyond the current 28% slab, in line with the proposed 35% special rate for sin goods such as tobacco and aerated beverages. The potential hike is aimed at balancing revenue losses from rate cuts on essential items, officials said.
For Ethos, which operates in the niche luxury segment and deals in high-end watch brands, the proposed tax hike could pose a challenge to its pricing strategy and consumer demand. The company’s clientele predominantly consists of affluent customers, which might partially cushion the impact, but higher taxes could weigh on retail sales if passed on to consumers.
Additional Context
Ethos has been reporting healthy financial performance, backed by growing demand for premium watches and strong customer loyalty. The company’s expansion into e-commerce and the rollout of exclusive brand boutiques have further strengthened its positioning in the luxury watch market.
