GST on Clothing in India — 5% or 18%?

It depends on the sale value per piece. Up to ₹2,500 per garment it is 5%; above ₹2,500 per garment it is 18%. The threshold is judged on each individual piece, not the total bill, and it applies regardless of whether the garment is branded or unbranded.

Three things changed from 22 September 2025: the 5% threshold rose from ₹1,000 to ₹2,500 per piece, the higher slab moved from 12% to 18%, and the old 12% slab was removed. Man-made fibre and yarn were also cut to 5% to fix the textile inverted-duty structure. Net effect: affordable apparel got cheaper, premium apparel got costlier.

₹2,500 is the sale value per piece (or per pair for footwear) that separates the 5% and 18% slabs. A garment at or below ₹2,500 is taxed at 5%; a garment above ₹2,500 is taxed at 18% on its full value, not just the amount above the threshold.

Each item. The threshold is per individual garment or pair, not the invoice total. Buying ten shirts of ₹800 each (bill ₹8,000) keeps every shirt at 5%, while a single ₹3,000 coat is taxed at 18%.

A saree is taxed on its sale value per piece like any other garment. If the value is ₹2,500 or below, GST is 5%; if it exceeds ₹2,500, GST is 18%. There is no special designer-wear category — brand or craftsmanship does not change the rate, only the price does.

School uniforms follow the same garment rule. Priced at or below ₹2,500 per piece they attract 5% GST; above ₹2,500 they attract 18%. There is no GST exemption specifically for school uniforms, though most uniforms fall comfortably under the 5% slab.

Footwear now follows the same ₹2,500 threshold as garments: 5% up to ₹2,500 per pair and 18% above ₹2,500 per pair, effective 22 September 2025. This replaced the earlier flat 12% rate and applies to leather, rubber, plastic and textile footwear alike.

Khadi fabric is taxed at 5%, and khadi garments follow the standard garment threshold (5% up to ₹2,500, 18% above). Certain khadi products sold through certified KVIC outlets may qualify for concessions under specific notifications, so confirm exemption eligibility with the outlet at the time of purchase.

Most fabric and yarn — cotton, silk, woven fabrics and, after GST 2.0, man-made fibre and yarn — are taxed at 5%. The cut on man-made fibre and yarn (from 12%/18% down to 5%) was made specifically to fix the inverted-duty structure that once trapped input credit in synthetic-textile units.

No. Under GST 2.0, man-made fibre, filament yarn and staple fibre yarn were reduced to 5% — the same rate as cotton and silk. This removes the earlier rate gap and the accumulated-credit refund problem it created for synthetic-textile manufacturers.

Yes. Registered manufacturers, wholesalers and retailers can claim Input Tax Credit on GST paid on cotton, yarn, fabric and purchased stock. Both the 5% and 18% garment slabs allow ITC. Final consumers buying for personal use cannot claim ITC.

Registration is mandatory once aggregate turnover crosses ₹40 lakh for a goods supplier in most states (₹20 lakh in special-category states). Selling through any e-commerce operator such as Myntra, Amazon or Flipkart, or making inter-state supplies, makes registration compulsory regardless of turnover.

No. Exports of garments and textiles are zero-rated under Section 16 of the IGST Act — the exporter charges 0% GST and can claim a refund of the accumulated Input Tax Credit on inputs used to make or trade the exported goods.

Yes. Anyone supplying goods through an e-commerce operator must be GST-registered from the first sale — the ₹40 lakh turnover threshold does not apply. Register before listing your products, or the marketplace may block your seller account.