GST on Textile, Fabric & Garments — 5% or 18%?

Yes, 5%. Cotton fabrics (HSN 5208–5212) attract 5% GST whether grey, bleached, dyed or printed. Raw cotton (HSN 5201–5203) and cotton yarn (HSN 5204–5207) are also at 5%, keeping the whole cotton value chain at a single 5% rate.

5%. Under GST 2.0, man-made filament and staple fabrics (HSN 5407–5408 and 5512–5516) were cut from 12% to 5%, the same as natural-fibre fabric. Man-made yarn was also cut from 12% to 5%. Only man-made fibre raw material (HSN 5501–5507) remains at 18%.

Yes. Silk fabrics (HSN 5004–5007) and wool fabrics (HSN 5106–5113) attract 5% GST, the same as cotton and — after GST 2.0 — the same as man-made fabric. Raw silk, silk yarn, raw wool and wool yarn are also at 5%.

Readymade garments and apparel priced up to ₹2,500 per piece attract 5% GST; garments priced above ₹2,500 per piece attract 18%. The GST 2.0 reform (effective 22 September 2025) raised the threshold from the earlier ₹1,000 to ₹2,500 and moved the upper slab from 12% to 18%.

Per piece. The rate is decided by the sale value of each individual garment, not the total invoice. Ten shirts at ₹1,500 each on one bill are all taxed at 5%, because no single piece exceeds ₹2,500. Only an individual garment whose sale value crosses ₹2,500 is taxed at 18%.

18%. Any article of apparel or made-up textile article with a per-piece sale value above ₹2,500 attracts 18% GST after GST 2.0 (up from the earlier 12%). Below or equal to ₹2,500, the rate is 5%.

Made-up textile articles such as bed linen, towels and curtains (HSN 6301–6308) follow the same per-piece rule as apparel: 5% up to ₹2,500 per piece and 18% above ₹2,500 per piece.

5%. Job work across the entire textile sector — weaving, knitting, dyeing, bleaching, printing, embroidery, finishing and stitching — attracts a concessional 5% GST under SAC 9988. If an activity falls outside textile job work, standard 18% GST may apply.

A textile business supplying goods must register once aggregate turnover crosses ₹40 lakh (₹20 lakh in special-category states). Businesses making inter-state supplies or selling through e-commerce may need to register regardless of turnover. Service or job-work turnover uses the ₹20 lakh service threshold.

Yes. Textile traders with turnover up to ₹1.5 crore can opt for the composition scheme and pay 1% of turnover, but they cannot collect GST on their bills or pass on input tax credit, and cannot make inter-state supplies. It suits small local B2C traders rather than exporters or wholesalers whose buyers need ITC.

Largely, yes. By cutting man-made yarn and fabric from 12% to 5%, GST 2.0 removed most of the inverted-duty mismatch in the man-made fibre chain. A residual inversion remains only at the fibre-to-yarn step, where fibre bought at 18% is spun into 5% yarn, which can still create refundable accumulated ITC.

Yes, where an inverted duty structure still applies. Under Section 54(3) of the CGST Act, a manufacturer whose input GST (for example 18% on man-made fibre) exceeds output GST (5% on yarn or fabric) can claim a refund of the accumulated input tax credit through the prescribed refund process.

Yes, if you are registered under the regular scheme, hold valid tax invoices and the credit appears in your GSTR-2B. Textile inputs, job-work charges and business expenses are eligible for input tax credit under normal rules. Composition dealers cannot claim ITC.

Textiles fall under HSN Chapters 50–63: silk (50), wool (51), cotton (52), man-made filaments (54), man-made staple fibres (55), knitted fabrics (60), knitted apparel (61), woven apparel (62) and made-up articles (63). Use a HSN finder to confirm the exact 6- or 8-digit code and rate for a specific product.

Khadi and hand-woven fabrics sold through KVIC or certified khadi outlets are at 5%, in line with all fabric. Certain hand-made and traditional items may have specific exemptions, so confirm the exact HSN on the GST portal for a particular product.