GST Rate & HSN Code: Articles of Apparel & Clothing Accessories

• Garments priced up to ₹1,500 will attract 5% GST, those priced between ₹1,500 and ₹10,000 will be taxed at 18%, and those costing above ₹10,000 will face a 28% GST rate.
• For shoes priced above ₹15,000, the GST rate is proposed to increase from 18% to 28%, potentially impacting the pricing and consumption of high-value footwear.
• Certain raw materials like raw jute and raw silk are exempt from GST, and worn clothing is taxed at a reduced 5% GST rate.

The ongoing revisions to GST laws in India can make it challenging to understand how they impact your clothing purchases. Whether you're a consumer or a retailer, understanding these changes is key to making smarter financial decisions.Let's break down the latest GST updates on clothing in simple terms. We’ll help you get a clear picture of what’s going on so that you can make a better sale or purchase next time.

After a meeting held on 21 December 2024, the GST council proposed changes to the taxation structure for apparel under the Constitution of Group of Ministers (GoM). These changes aim to rationalise tax rates across different price ranges of garments. Proposed GST Rates on Ready-made Garments

• Garments costing up to ₹1,500: 5% GST
• Garments costing between ₹1,500 and ₹10,000: 18% GST
• Garments costing above ₹10,000: 28% GST

Proposed GST Hike on Shoes

• For shoes priced above ₹15,000 per pair, the GST rate is proposed to be increased from 18% to 28%.

If these proposed changes are implemented, they could have a significant impact on the pricing and consumption patterns of ready-made garments and high-value footwear.GST on Clothes, Ready-made Garments, and Textiles GST on clothes and textiles varies based on price and material. Whether you’re buying or selling, it’s helpful to know the specific rates. Let’s take a look at the current GST details for these products

• GST on clothes priced below ₹1,000 attracts 5% GST, while those priced ₹1,000 or more attract a 12% GST rate .
• Ready-made garments are taxed at 12% GST, and synthetic or man-made fibres face an 18% GST rate.
• The standard GST rate for textile products is 12% , while 5% GST is applied if the cost of apparel and footwear is less than ₹1,000.
• For raw cotton, buyers must pay GST on a reverse charge basis at 5%, meaning the GST is paid directly by the receiver instead of the supplier.
• In contrast, raw jute and raw silk are exempt from GST, so dealers and mills handling these materials do not need to register under GST or pay taxes.

Also Read: Link GST Impact on Indian Economy

From basic garments to fabric materials, let's take a look at their GST rates and HSN codes that can help you make an informed purchase: [1]

The Union Budget 2025-26 was presented by the Union Finance Minister on 1st February, 2025. The budget announced an outlay of ₹5272 crores (budget estimates) for the Ministry of Textiles for 2025-26, marking an increase of 19 percent over the budget estimates of 2024-25 (₹4417.03 crore).This budget brings several key changes that will impact the textile sector, including provisions that could influence GST rates and the competitiveness of India’s textile industry. Here's a detailed look:

The Union Budget has introduced a five-year Cotton Mission designed to boost cotton productivity, especially for the extra-long staple varieties. This is great news for the textile industry, as it will help ensure a steady supply of quality cotton.As a result, raw material availability will stabilise, and there will be less reliance on imports. This could make a significant difference for domestic manufacturers as it strengthens the supply chain and enhances your ability to compete in the market.

If you're involved in the technical textile sector, this budget has some exciting news for you. Two types of shuttle-less looms have been added to the list of fully exempted textile machinery. This change means you can access high-quality imported looms at a lower cost, which will help you modernise and expand your capacity.It’s all part of the push to make the technical textile sector more competitive and aligned with India’s growing focus on sectors like agro-textiles, medical textiles, and geo-textiles.

For those of you working in knitted fabric production, the budget includes a change that could directly impact your business. The basic customs duty on knitted fabrics has been increased to boost domestic production and help you stay competitive. This hike is aimed at curbing cheap imports, so it’s a positive shift for manufacturers in India.While it could lead to some price changes, it’s also an opportunity to see more growth in the local production of knitted fabrics, which could benefit your overall cost structure. Export Facilitation and Duty-Free Inputs Good news for exporters of handicrafts—this budget extends the time period for exporting duty-free raw materials, which gives you more flexibility in managing your production schedules. On top of that, several materials, including wool polish materials, seashells, and cattle horn, are now duty-free.If you rely on these inputs for your products, this will help reduce costs and simplify your export processes. It's a step towards making it easier for you to grow your business internationally.

For both consumers and retailers, staying up-to-date with the latest changes in GST regulations is essential to remain compliant and competitive.Although there haven't been significant updates to the GST structure for clothing since 2022, it's crucial to monitor any new developments; particularly the recent changes in the 2025 Union Budget. These updates can directly affect your finances, pricing strategies, and overall business operations.Whether you’re trying to figure out the GST rates on garments or understanding how shifts in customs duties impact costs, staying informed ensures you're not caught off guard. By seeking expert advice when needed and staying on top of compliance, you’ll be able to avoid penalties, manage your taxes efficiently, and make smarter business decisions. Also Read: Link Understanding the Impact of GST on Health Insurance: Changes in Rates and Policies

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