GST on Textile, Fabric & Garments — Complete Rate Guide (2026)
Updated: 3 June 2026 | CGST Notification | Schedules I–IV
GST on textile follows a two-tier structure: 5% on natural fibre fabrics (cotton, silk, wool) and 12% on man-made fibre fabrics (polyester, nylon, viscose). Readymade garments priced up to ₹1,000 per piece attract 5% GST; garments above ₹1,000 attract 12% GST. Job work in textiles (weaving, dyeing, printing) is taxed at 5%.
5% / 12%
Textile GST rate depends on fibre type and garment price
5% for natural fibres and garments ≤₹1,000. 12% for man-made fibres and garments >₹1,000.
5% for natural fibres and garments ≤₹1,000. 12% for man-made fibres and garments >₹1,000.
Inverted Duty Issue: Manufacturers using man-made fibre inputs (taxed at 12–18%) to produce 5% garments often accumulate excess ITC. Such manufacturers can claim a GST refund on accumulated ITC under Section 54(3) of the CGST Act.
GST Rate Table for Textile Products (2026)
| Product | HSN | GST Rate | Notes |
|---|---|---|---|
| Raw cotton | 5201–5203 | 5% | Unginned, ginned, cotton waste |
| Cotton yarn (single, carded/combed) | 5205–5207 | 5% | Includes sewing thread |
| Cotton fabrics (woven) | 5208–5212 | 5% | Grey, bleached, dyed, printed |
| Silk fabrics (woven) | 5007 | 5% | Includes raw silk and noil |
| Wool fabrics (woven) | 5111–5113 | 5% | Woven fabrics of wool/fine animal hair |
| Jute fabrics | 5310 | 5% | Woven fabrics of jute/other textile bast |
| Man-made filament yarn (polyester/nylon) | 5402–5406 | 12% | Synthetic and artificial filament yarn |
| Man-made staple fibre yarn (viscose/acrylic) | 5509–5511 | 12% | Yarn of synthetic/artificial staple fibres |
| Man-made filament fabric (polyester) | 5407–5408 | 12% | Woven fabrics of synthetic/artificial filament |
| Man-made staple fibre fabric | 5512–5516 | 12% | Polyester/viscose blended fabrics |
| Garments ≤₹1,000/piece | 6101–6117 / 6201–6217 | 5% | All apparel — knitted or woven |
| Garments >₹1,000/piece | 6101–6117 / 6201–6217 | 12% | Rate based on transaction value per piece |
| Knitted/crocheted fabrics | 6001–6006 | 5% / 12% | 5% natural fibre, 12% man-made fibre |
| Made-up textile articles (bed linen, towels) | 6301–6308 | 5% / 12% | Depends on fibre composition |
| Technical textiles (geotextiles, filter cloth) | 5911 | 12% | Industrial/technical use products |
| Hand-woven fabric (khadi) | Various | 5% | Concessional — sold through KVIC/khadi outlets |
GST on Job Work in Textile Industry
Job work services in textiles attract 5% GST under Notification 11/2017-CT(Rate), SAC 9988. This concessional rate applies to:
- Weaving — converting yarn to fabric on job work basis
- Dyeing and bleaching of yarn or fabric
- Printing — screen printing, digital printing on fabric
- Embroidery — hand or machine embroidery on fabric/garments
- Finishing — calendaring, stentering, compacting
- Cutting and sewing — stitching of garments on job work for a principal
If the job worker performs services not falling under SAC 9988 or if services are to an unregistered principal and conditions under Section 143 are not met, standard 12% or 18% GST may apply.
Inverted Duty Structure in Textiles
Inverted duty structure (IDS) is a significant challenge for Indian textile manufacturers — particularly in the man-made fibre (MMF) segment:
- Polyester/viscose fibre: 18% GST
- Polyester/viscose yarn: 12% GST
- Polyester fabric (output): 12% GST
- Garments (output): 5% or 12% GST
When output GST (5% on garments) is lower than input GST (12–18% on fibres and yarn), manufacturers cannot fully utilise ITC. The accumulated ITC can be refunded under Section 54(3) of CGST Act — but refund processing takes time and creates working capital stress.
Composition Scheme and Registration Threshold
Textile businesses with turnover below ₹40 lakh (goods) or ₹20 lakh in special category states are not required to register for GST. Those with turnover below ₹1.5 crore can opt for the Composition Scheme — but composition dealers cannot issue tax invoices or collect GST from customers.
Composition Scheme — Not Recommended For
- Exporters (cannot claim refund of IGST on exports under composition)
- Businesses receiving goods from other states (inter-state purchases not allowed under composition for goods)
- Businesses whose customers need to claim ITC on their purchases
Frequently Asked Questions
What is the GST rate on readymade garments?
Readymade garments priced at ₹1,000 or below (per piece) attract 5% GST. Garments priced above ₹1,000 attract 12% GST. The price threshold applies to the transaction value per piece — not per kilogram or per set. This means a shirt sold at ₹999 is taxed at 5%, while the same shirt at ₹1,001 is taxed at 12%. Apparel exporters can claim a refund of ITC accumulated due to this inverted duty structure.
Is there GST on cotton fabric?
Yes. Cotton fabrics (HSN 52) attract 5% GST. This applies to woven fabrics of cotton — whether grey (unbleached), bleached, printed, or dyed. Raw cotton (HSN 5201-5203) also attracts 5% GST. Cotton yarn (HSN 5205-5207) is also at 5%. The 5% rate across the cotton value chain was designed to keep textiles affordable for domestic consumers.
What is the inverted duty structure issue in textiles?
Inverted duty structure occurs when the GST on inputs is higher than the GST on the output (finished goods). In textiles, some synthetic yarn and fibre inputs attract 12% or 18% GST while the finished fabric/garment is taxed at 5%. This means manufacturers accumulate excess ITC that cannot be used — creating a working capital blockage. The government has addressed this partially, but manufacturers in the man-made fibre segment still face this issue and must claim refunds.
What is the GST rate on job work in the textile industry?
Job work services in the textile sector — such as weaving, knitting, dyeing, printing, embroidery, and finishing — attract 5% GST. This concessional rate applies specifically to job work on textile yarns and fabrics and was introduced to support the large decentralised textile processing sector in India (powerloom weavers, dyeing units, etc.). If the job work falls under a different category, it may attract 12% or 18%.
Are silk and wool fabrics taxed at the same rate as cotton?
Yes. Silk fabrics (HSN 50) and wool fabrics (HSN 51) also attract 5% GST, the same as cotton fabrics. Raw silk and raw wool similarly attract 5%. However, man-made filament fabrics (polyester, nylon — HSN 54) and man-made staple fibre fabrics (HSN 55) attract 12% GST, making them more expensive than natural fibre fabrics for the same end use.
Related GST Pages
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