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Guide · GST Rates

GST on Clothing in India —
5% or 18%?

The correct GST rate on readymade garments, fabric, yarn and footwear after GST 2.0 — the new ₹2,500 per-piece threshold, HSN codes, ITC for manufacturers and export rules.

TaxClue Editorial Desk Updated 18 August 2026 5 min read 15 FAQs answered
Updated for FY 2026-27 GST Expert Reviewed Garment · Fabric · Footwear
Quick Answer

Readymade garments and clothing accessories with a sale value up to ₹2,500 per piece attract 5% GST; those above ₹2,500 per piece attract 18% GST. This threshold rose from ₹1,000 to ₹2,500 under the GST 2.0 reform effective 22 September 2025, and the higher slab moved from 12% to 18%. Fabric, most yarn and man-made fibre are now taxed at 5%.

Garment ≤ ₹2,500 5%
Garment > ₹2,500 18%
Fabric & yarn 5%
Exports 0% (zero-rated)
At a glance

GST Rates on Clothing & Apparel — Decision Table

The GST rate for every common apparel and footwear scenario in India after GST 2.0, based on the sale value per piece. Rates apply to Chapters 61, 62 and 64 of the GST tariff.

ItemHSNConditionGST Rate
Readymade garments (shirts, trousers, kurtas)6101-6114Sale value ≤ ₹2,500/piece5%
Readymade garments (shirts, trousers, kurtas)6101-6114Sale value > ₹2,500/piece18%
Women's apparel (sarees, blouses, suits)6204-6211≤ ₹2,500/piece5%
Women's apparel (sarees, blouses, suits)6204-6211> ₹2,500/piece18%
Kids & infant clothing6111-6114≤ ₹2,500/piece5%
Footwear6401-6405≤ ₹2,500/pair5%
Footwear6401-6405> ₹2,500/pair18%
Made-ups (bed linen, towels, curtains)6301-6310≤ ₹2,500/piece5%

Rates reflect the GST 2.0 two-slab structure effective 22 September 2025. Confirm the item HSN on the official GST portal before invoicing.

The core rule

The ₹2,500 Per-Piece Threshold

For garments and footwear, one number decides the rate: the sale value per piece (or per pair). Up to ₹2,500 it is 5%; cross ₹2,500 and the whole item is taxed at 18% — there is no partial or slab-wise split.

5%

Up to ₹2,500 per piece

  • Everyday shirts, trousers, kurtas, sarees
  • Kids & infant clothing
  • Footwear ≤ ₹2,500/pair
  • Made-ups (bed linen, towels)
  • ITC available for registered sellers
vs
18%

Above ₹2,500 per piece

  • Premium & designer garments
  • Wedding lehengas / sherwanis
  • Branded shoes above ₹2,500/pair
  • Applies to the full value, not the excess
  • ITC available for registered sellers
The threshold is per piece — not per invoice

The ₹2,500 limit is judged on each individual garment or pair, not the total bill. Ten shirts of ₹800 each (bill ₹8,000) are all 5%; a single ₹3,000 jacket is 18%. Branded vs unbranded makes no difference — only the sale value per piece decides the rate.

Not sure which rate applies to your product range?

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Raw materials

GST on Fabric, Yarn & Raw Textiles

GST 2.0 corrected the old inverted-duty structure in textiles by cutting man-made fibre and yarn to 5%, so most inputs now sit at the same 5% as natural fabrics.

ItemHSNGST Rate
Raw cotton5201-52035%
Cotton & silk yarn5004-5006, 5205-52075%
Woven cotton fabrics5208-52125%
Man-made filament yarn (polyester, nylon)5401-54065%
Man-made staple fibre & yarn5501-55115%
Woven synthetic / MMF fabrics5407-5408, 5512-55165%
Handloom & khadi fabricVarious5%

Man-made fibre and yarn were cut from 12%/18% to 5% under GST 2.0 to fix the textile inverted-duty structure.

Because inputs (5%) and lower-value output (5%) now match, the accumulated-credit refund problem that once hit synthetic-textile units is largely resolved. Units selling above ₹2,500 (18% output) can fully absorb their 5% input credit.

Worked example

How GST Adds Up on a Garment

5% Shirt priced ₹1,500

Sale value₹1,500
GST @ 5%₹75
Customer pays₹1,575

18% Jacket priced ₹4,000

Sale value₹4,000
GST @ 18%₹720
Customer pays₹4,720

The 18% applies to the entire ₹4,000, not just the amount above ₹2,500 — so pricing a garment just over the threshold sharply raises the tax. Use our GST calculator to check any value instantly.

Set sale valuePer piece / per pair
→
Check the HSNChapter 61 / 62 / 64
→
Apply threshold≤ ₹2,500 = 5%, else 18%
→
Invoice & fileCharge GST, claim ITC

Selling garments online or in-store? Get your rate classification & invoicing set up right.

Get Garment GST Advice →
Credit, exports & registration

ITC, Exports & Compliance for Garment Businesses

Registered manufacturers, wholesalers and retailers in the garment chain can claim Input Tax Credit on GST paid on inputs. Both the 5% and 18% garment slabs now allow ITC.

  • A manufacturer claims ITC on cotton, yarn and fabric used as raw material.
  • A trader/retailer claims ITC on GST paid when buying stock from the manufacturer.
  • ITC is not available to final consumers buying for personal use.
  • Exports of garments are zero-rated under Section 16 of the IGST Act — 0% GST, with a refund of accumulated ITC.

You must register for GST if

  • Turnover crosses ₹40 lakh (goods) in most states
  • You supply through Amazon, Myntra, Flipkart or any e-commerce operator
  • You make inter-state supplies of garments
  • You want to claim ITC or an export refund

You may stay out of GST if

  • Turnover is below the ₹40 lakh goods threshold
  • You sell only locally, not via e-commerce
  • You are a purely intra-state small trader
  • (Special-category states: ₹20 lakh threshold)
TaxClue Insight

Selling on Myntra, Amazon or Flipkart makes GST registration compulsory from the first rupee — the turnover threshold does not apply to e-commerce sellers. Get registered before you list, or your account can be blocked.

Government sourcesRates & notifications: gst.gov.in · CBIC rate finder: cbic-gst.gov.in · GST 2.0 apparel & textiles relief: PIB / Ministry of Textiles (56th GST Council, 3 Sep 2025) · Effective date: rate changes notified w.e.f. 22 September 2025
People also ask

Frequently Asked Questions

Rates & Slabs
What is the GST rate on clothes in India?
Readymade garments and clothing accessories with a sale value up to ₹2,500 per piece are taxed at 5% GST, and those above ₹2,500 per piece at 18%. This structure took effect on 22 September 2025 under the GST 2.0 reform, which raised the concessional-rate threshold from ₹1,000 to ₹2,500 and moved the higher slab from 12% to 18%.
Is GST on clothes 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.
What changed for GST on clothing under GST 2.0?
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.
What is the GST threshold of ₹2,500 for garments?
₹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.
Does the ₹2,500 limit apply to the whole bill or each item?
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%.
Specific Items
What is the GST rate on a designer saree?
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.
What is the GST rate on children's school uniforms?
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.
What is the GST rate on footwear?
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.
Is Khadi exempt from GST?
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.
Fabric & Yarn
What is the GST rate on fabric and yarn?
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.
Is man-made fibre still taxed higher than cotton?
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.
ITC & Registration
Can garment manufacturers and traders claim ITC?
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.
When must a clothing business register for GST?
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.
Are exported garments subject to GST?
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.
Do I need GST registration to sell clothes on Myntra or Amazon?
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.
If you would rather not do it yourself

Related TaxClue services

GST RegistrationGet your garment or textile business registered with the correct HSN classification.See the service →GST Return FilingMonthly GSTR-1 & 3B with marketplace payout reconciliation, done for you.See the service →Export Refund (LUT)Zero-rated export refunds and LUT filing for garment exporters.See the service →ITC ReconciliationClaim eligible input credit on yarn, fabric and stock without errors.See the service →
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