GST On Clothes: Tax Rates, HSN Codes, & Applicability for 2025!

Ever thought why those ₹999/- T-shirts feel like the best deal above ₹1000/-? The catch is the elegant print of GST on clothes. 

The Goods and Services Tax (GST) have redefined the way garments are purchased, sold, and priced. It doesn’t matter if you are a buyer, looking out for the best deals or holding an apparel brand or a retail shop managing GST-ready invoices; understanding GST on textiles, HSN codes, and applicability of the rates is crucial. It helps to reduce compliance headaches and crack the best deals. 

This blog will guide you through applicable GST on readymade clothes and how it affects the pricing. Let’s scroll below to quickly check how tax is applied and the way it influences our strategic decision. 

Recent GST on Clothes In India Updates for 2025

1. During the 2024 budget meeting, the Apparel Export Promotion Council (AEPC) presented a structured format for Goods and Services Tax in the textile industry. It proposed tax incentives, uniformity in GST rates, and improved subsidies to support vendors and local manufacturers. 
2. AEPC requested to allow tax concessions for the textile manufacturers who follow the global quality standards and Environmental, Social, and Corporate Governance (ESG) rules. They also presented budget allocation for marketing and advertising the Indian brands. 
3. Also, earlier, the equalisation rates were reduced from 3% to 2% for non-MSMEs, for which AEPC requested to make it 5% for apparel traders. 

What are the Current Rates of GST on Readymade Clothes? 

The GST on clothes in India is applied based on the selling price of every clothing item. 

• The GST rate for garments valued at ₹1,000 or below is fixed at 5%.
• A GST rate of 12% applies to clothing priced above ₹1,000 per piece.

These rates are levied on almost all garments, which include readymade clothing, sarees, trousers, shirts, and more. 

How to Calculate GST On Clothes? 

To compute the cloth GST rate in India, you first need to identify GST rates based on the apparel’s pricing and category. Here’s a step-by-step process to calculate GST on apparel: 

1. Check the pricing and applicable GST rates. The values should be determined per item and not the entire billing amount.
   1. Apparel price at ₹1,000 per piece or below = 5% GST applied 
   2. Garments valued over ₹1,000 each = 12% GST.

2. Validate the appropriate HSN code for the apparel as per GST regulations.
3. Formula: 

GST Amount = (Selling Price x Cloth GST Rate) / 100 

1. To determine the final amount, include the GST charge in the selling price of the garment.

Type of Apparel, HSN Code & Applicable GST Rate 

Whether it’s everyday clothing or premium fashion, knowing the right GST rate helps customers choose wisely and enables sellers to prepare invoices that meet GST and HSN standards. Let’s scroll down to see the GST rates in detail:

Type of Apparel	HSN Code	Sale Price	GST Rate
Knitted or crocheted garments (e.g., T-shirts, sweaters)	61	Up to ₹1,000	5%
		Above ₹1,000	12%
Not knitted or crocheted (e.g., trousers, shirts, dresses)	62	Up to ₹1,000	5%
		Above ₹1,000	12%
Worn clothing and used textiles	6309/6310	Any price	5%
Handmade/hand   embroidered   shawls	6117, 6214	Up to ₹1,000	5%
		Above ₹1,000	12%
Worn clothing and other worn articles	6309 or 6310	Any Price	5%
Other apparels made up of textile articles (other than Worn clothing)	63	Above ₹1,000	12%

HSN Code and GST on Textiles: A Complete Breakdown 

The applicable HSN code and GST on textiles completely depend on the fabric type, garment, and the sale value. This process helps businesses organise textiles under the right GST classification. Every textile item is identified by a unique HSN code that defines the GST rate to be applied. 

This facilitates trade uniformity across the apparel industry. Let’s see a quick breakdown of HSN codes and GST on textiles. 

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	Supply of garneted wool, various grades of animal hair, and recycled wool.	5104	5%
4	Carded or combed varieties of wool and animal hair.	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	Raw or treated flax that is not spun, plus flax tow, yarn waste, and garneted stock.	5301	5%
12	Non-jute textile bast fibres in raw or treated form, not yet spun.Waste and tow from these fibres, covering yarn waste and garneted material.	5303	5%
13	Complete range of goods, including flax yarn, jute yarn, yarn from other textile bast fibres, 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 textile strips consisting solely of warp yarns, held together with adhesive (bolducs).	5806	5%
23	All goods of Knitted or crocheted fabrics	60	5

How GST on Clothes Drives Strategic Decisions for Businesses? 

1. It helps brands to attract price-sensitive customers and benefit from 5% GST by positioning apparel under ₹1,000. 
2. Businesses can modify their clothing fabrics to cater to the mass audience by displaying affordable product categories. 
3. HSN codes and the applicable cloth GST rate help to sort the inventory efficiently. 
4. Understanding the applicability of GST rates helps to structure discounts and offers without compromising profits. 
5. GST on clothes also affects decisions to choose vendors and traders. 

Conclusion 

In India, HSN codes and GST on clothing affect more than just compliance – they impact product pricing, buying strategies, and stock control. They influence pricing, buying, and stocking decisions. Accurate GST knowledge gives a clear edge in the textile industry, irrespective of whether you are a retailer or a vendor. 

So, before you shop for apparel or ship your next courier, bookmark this blog and stay ahead of the compliance norms. 

FAQs of GST on Clothes 

1. What GST rate is charged on sarees in India? 

Silk and Handloom sarees are levied with 5% GST rate in India. 

2. Can I claim GST on clothes?

Yes, you can claim GST on clothes in India if you are a registered business purchasing for resale or business needs. 

3. Is GST applicable on Clothes made for babies in India? 

Yes, the cloth GST rate applied on baby garments is 5% in India. 

4. Can I sell clothes without applying the cloth GST rate? 

Yes, you can sell garments online without applying GST rates, but make sure they are tax-free. 

5. Are there exemptions for GST on clothes in India? 

Yes, raw jute and silk materials are exempt from GST rates in India. This means, textile mills dealing with these fabrics don’t need to pay taxes or register under the Goods and Services Tax. 

6. Is the Cloth GST rate included in the MRP of garments? 

That’s correct, MRP should include GST rates under the Goods and Services Tax regime. 

7. What is the applicable GST rate for manmade fibers and yarns? 

Applicable GST rate for manmade fibers and yarns is 18%. 

8. What is the GST rate on tailoring services in India? 

GST rate on tailoring services is reduced from 18% to 5%.