On readymade garments, GST is 5% if the sale value is up to ₹2,500 per piece and 18% if it exceeds ₹2,500 per piece (HSN 6101–6217). This threshold changed under GST 2.0 effective 22 September 2025 — the earlier ₹1,000 limit and the 12% slab were removed. Unstitched fabric stays at 5% whatever the price, and exports are zero-rated with an ITC refund.
GST Rate on Garments, Fabric & Accessories
The current GST rate for every common apparel and textile scenario, with HSN code and ITC position, under the two-slab GST 2.0 structure.
| Item | GST Rate | HSN | ITC / Notes |
|---|---|---|---|
| Readymade garment ≤ ₹2,500/piece | 5% | 6101–6217 | ITC yes T-shirts, shirts, trousers, kurtas |
| Readymade garment > ₹2,500/piece | 18% | 6101–6217 | ITC yes Designer & premium apparel |
| Cotton fabric (unstitched) | 5% | 5208–5212 | Any value |
| Silk fabric / saree (unstitched) | 5% | 5007 | Any value |
| Synthetic / man-made fabric | 5% | 5407–5408 | Any value |
| Woollen fabric | 5% | 5111–5113 | Any value |
| Job work — stitching / apparel | 5% | 9988 | On job-work charges |
| Made-ups (bedsheets, curtains) ≤ ₹2,500 | 5% | 63 | Above ₹2,500 → 18% |
| Export of garments | 0% | — | Zero-rated · claim ITC refund |
Reflects the GST 2.0 two-slab structure effective 22 September 2025 (56th GST Council). Confirm on the official GST portal before invoicing.
Which GST Rate Applies to Your Garment?
For stitched apparel, one number decides it: the sale value per piece. The cut-off is now ₹2,500 (raised from ₹1,000 under GST 2.0). Branding, AC vs non-AC and fabric type do not change the rate.
Up to ₹2,500 per piece
- Mass-market shirts, tees, trousers, kurtas
- School uniforms & children's wear
- Innerwear, ethnic wear under ₹2,500
- Full ITC available on inputs
- Covers most everyday apparel
Above ₹2,500 per piece
- Designer & premium apparel
- Formal suits, sherwanis, gowns
- Any single piece priced over ₹2,500
- Full ITC still available
- Value is per piece, not per invoice
A single invoice can mix both rates. Two ₹1,500 shirts (₹3,000 total) are still 5% each because each piece is under ₹2,500. One ₹3,000 blazer on the same bill is 18%. Classify GST piece-by-piece on the per-unit sale value, not the invoice total.
Not sure how to bill mixed-rate garment invoices?
Get My GST Rate →GST on Fabric & Unstitched Cloth
A crucial distinction: unstitched fabric is not a garment. All woven, knitted and man-made fabric — cotton, silk, wool, polyester, blends — is taxed at a flat 5% regardless of value. Only once cloth becomes a stitched, readymade garment does the ₹2,500 threshold apply.
- A saree, suit length or dress material sold unstitched is fabric → 5%, whatever the price.
- The same saree sold pre-stitched as a readymade garment follows the 5% / 18% apparel rule.
- Job work such as stitching or tailoring charges are taxed at 5% under SAC 9988.
How GST Adds Up on Garments
5% Shirt priced ₹1,500
18% Blazer priced ₹4,000
Because the ₹2,500 cut-off is per piece, a retailer must apply the correct rate line-by-line. A GST calculator helps split mixed-rate invoices cleanly.
Running a garment shop or online store? Get your billing & HSN mapping set up right.
Get Garment GST Advice →Input Tax Credit & Export of Garments
Garment manufacturers, wholesalers and retailers can claim Input Tax Credit on fabric, accessories (buttons, zips), packaging, machinery, rent and utilities against GST on their outward garment supply. Composition dealers cannot claim ITC.
You can claim ITC when
- You are regular-registered (not composition)
- You hold valid tax invoices for inputs
- Inputs are used to make or trade garments
- Credit appears in your GSTR-2B
Watch out for
- Inverted duty — 18% inputs (embroidery/print) vs 5% output can accumulate credit
- Composition dealers get no ITC at all
- Blocked credits under Section 17(5)
- Export refunds need correct LUT / shipping-bill filing
If you sell 5% garments but pay 18% on services like embroidery, printing or job accessories, your input tax can exceed output tax. Exporters can claim this as a refund; domestic sellers may accumulate credit and should plan cash flow and, where eligible, apply for an inverted-duty refund.
Exporting garments or stuck with accumulated ITC?
Talk to a GST Expert →Garment Business GST Compliance Checklist
Registration is mandatory once aggregate turnover crosses ₹40 lakh for goods (₹20 lakh in special-category states). Small traders may opt for the composition scheme at a lower flat rate without ITC. Core compliance for a garment business:
- GST registration (GSTIN)
- Correct 5% / 18% classification by piece
- Right HSN (6101–6217) on invoices
- Tax invoice / bill of supply
- GSTR-1 (outward supplies)
- GSTR-3B (monthly / quarterly)
- ITC reconciliation with GSTR-2B
- E-invoicing (if turnover applies)
- E-way bill on goods movement
- LUT & refund filing (exporters)
- GSTR-9 annual return
- Composition CMP-08 / GSTR-4 (if opted)
Many POS and invoicing systems still carry the old ₹1,000 cut-off and the 12% slab. After GST 2.0 (22 Sep 2025), map garment SKUs to 5% up to ₹2,500 and 18% above it, and remove the 12% option — charging 12% now is incorrect.
Frequently Asked Questions
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