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GST on Clothes, Readymade Garments and Textiles
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.
Sr.No |
ITEMS |
HSN Code |
GST Rate |
Conditions |
| 1 | Apparel and clothing accessories or cap/topi, knitted or crocheted. | 61 or 6501 or 6505 | 5% | Sale value not exceeding Rs 1000 per piece |
| 2 | Apparel and clothing accessories, not knitted or crocheted | 62 | 5% | Sale value not exceeding Rs. 1000 per piece |
| 3 | Other made up textile | 63 (other than 6305 32 00, 6309) | 5% | Sale value not exceeding Rs. 1000 per piece |
| 4 | Handmade/hand embroidered shawls | 6117, 6214 | 5% | Sale
value not exceeding Rs. 1000 per piece |
| 5 | Worn clothing and other worn articles | 6309 or 6310 | 5% | – |
| 6 | Apparel and clothing accessories, knitted or crocheted. | 61 | 12% | Sale value exceeding Rs. 1000 per piece |
| 7 | Apparel and clothing accessories,
not knitted or crocheted. |
62 | 12% | Sale value exceeding Rs. 1000 per piece |
| 8 | Other made up textile articles (other than Worn clothing) | 63 | 12% | Sale value exceeding Rs. 1000 per piece |
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.
Sr.No |
ITEMS |
HSN Code |
GST Rate |
| 1 | Silk yarn | 5004 to 5006 | 5% |
| 2 | Woven fabrics of silk or of silk waste | 5007 | 5% |
| 3 | Garneted stock of wool, fine or coarse animal hair, shoddy wool | 5104 | 5% |
| 4 | Wool and fine or coarse animal hair, carded or combed | 5105 | 5% |
| 5 | Yarn of wool or animal hair | 5106 to 5110 | 5% |
| 6 | Woven fabrics of wool or animal hair | 5111 to 5113 | 5% |
| 7 | Cotton and Cotton waste | 5201 to 5203 | 5% |
| 8 | Cotton sewing thread (whether or not put up for retail sale) | 5204 | 5% |
| 9 | Cotton yarn [other than khadi yarn] | 5205 to 5207 | 5% |
| 10 | Woven fabrics of cotton | 5208 to 5212 | 5% |
| 11 | Flax, raw or processed but not spun; flax tow and waste (including yarn waste and garneted stock) | 5301 | 5% |
| 12 | Textile bast fibres (Other than jute fibres, raw or processed but not spun)
Tow and waste of these fibres ((including yarn waste and garneted stock)) |
5303 | 5% |
| 13 | All goods including yarn of flax, jute, other textile bast fibres, other vegetable textile fibres and paper yarn. (other than coconut coir fibre) | 5305 to 5308 | 5% |
| 14 | Woven fabrics of vegetable textile fibres, paper yarn | 5309 to 5311 | 5% |
| 15 | Woven fabrics of manmade textile materials | 5407, 5408 | 5% |
| 16 | Woven fabrics of manmade staple fibres | 5512 to 5516 | 5% |
| 17 | Real zari thread (gold) and silver thread | 5605, 5600, 5610 | 5% |
| 18 | Jute twine, coir cordage or ropes | 5607 | 5% |
| 19 | Knotted netting of twine, cordage or rope | 5608 | 5% |
| 20 | Products of coir | 5609 | 5% |
| 21 | Coir mats, matting, floor covering and handloom durries | 5702, 5703, 5705 | 5% |
| 22 | Narrow fabrics consisting of warp without weft assembled by means of an adhesive (bolducs) | 5806 | 5% |
| 23 | All goods of Knitted or crocheted fabrics | 60 | 5% |
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.
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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.
