GST Rates & HSN Codes for Silk and Textile Products

• Raw silk, silk waste, and silk yarn are eligible for a lower GST rate of 5% to promote silk farming and traditional weaving sectors.
• Processed textiles, including woven silk fabrics, are charged 12% GST as they are finished and dyed.
• Embroidered silk fabrics and luxury textiles are charged 18% GST, increasing the cost of high-value textile products.
• Correct HSN code classification allows for proper GST application, enabling businesses to claim input tax credit (ITC) as due.

The textile sector is among the largest contributors to the Indian economy, with a very wide range of products, including fibres, fabrics, yarns, and garments. Textiles and textile articles come under Chapter 50 to Chapter 63 of the HSN Code system under the goods and services tax (GST) regime, with Chapter 50 being exclusively for silk and silk products.GST rates on textiles differ according to material, processing, and product categories, from 5% to 18%. Textile businesses need to be aware of the appropriate HSN classification and corresponding GST rates to be compliant and avoid the wrong filing of taxes. Also Read - Know how GST works in India

Textile articles falling under Chapter 50 are categorised according to their raw material content and production process. The following GST rates are applicable for them:

The saree HSN codevarieswiththetype offabricusedformaking them.Followingare theHSN codes and GST ratesapplicableforvarioustypes of sarees:

Also Read - Find out which goods and services are exempted from GST

HSN Chapter 50 exclusively addresses silk and silk-based products, such as raw silk, silk yarn, and woven silk fabrics. As sarees produced from pure silk are products of silk fabrics, HSN Code 5007 (woven fabrics of silk or silk waste) directly impacts the HSN classification of silk sarees. The impact of HSN 50 on Saree HSN Code is shown below: Silk Sarees Come Under HSN 5007 Pure silk sarees fall under HSN Code 5007 and are subject to 5% GST if they are less than ₹1,000 per piece and 12% GST if they are more than ₹1,000 per piece. This category includes sarees that are made of natural silk, such as Banarasi silk, Kanchipuram silk, and Tussar silk sarees. Artificial Silk Sarees Are Taxed Differently If a saree is produced from artificial silk (viscose, polyester-blended silk, etc.), it comes under HSN Code 5408 or 5407 and is charged at 5% GST (if less than ₹1,000) or 12% GST (if more than ₹1,000). This differentiation provides different taxes to natural silk sarees compared to synthetic silk sarees. Effect on Blended Silk Sarees Sarees with both silk and some other fibre content (such as cotton or polyester blends) are categorised according to whatever material they contain the majority of. Where there is high silk content, they may even fall under HSN 5007; otherwise, they may come under HSN 5208 (cotton-based) or HSN 5408 (synthetic blends). Impact on Embroidered or Designer Silk Sarees If silk sarees are heavily embroidered and contain zari work or embellishments, they may qualify for HSN 5810 and incur 12% or 18% GST, based on the extent of decoration.

Comprehension of cloth HSN code and GSTrate on textiles and textile articles is significant for companies operating in the textile manufacturing, trading, and retail sectors.Silk and products made of silk are classified in Chapter 50 according to the stage of processing, with raw silk, silk waste, and silk yarn facing a reduced rate of GST of 5% to promote traditional weaving and sericulture industries. Processed fabrics, like woven silk and blended synthetics, are taxed at 12%, while luxury textile goods like embroidered silk cloth and home furnishings come under the 18% GST category.As different textile items come under different tax categories, accurate classification under the relevant HSN code is a must for compliance, correct tax payment, and availing of input tax credit (ITC). You can also use the GST calculator to find the applicable GST and file your returns correctly.By being updated on GST news and HSN categories, companies can maximise their tax design, minimise compliance threats, and run smooth operations in the fast-paced textile market. To remain updated, companies may check the official GST website or consult experienced tax advisors.