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The GST Council has implemented a significant revamp of the tax structure for the textile, apparel, and footwear industries. Effective from September 22, 2025, the revised framework introduces just two main tax slabs — 5% and 18% — aimed at simplifying the system. These reforms are intended to encourage industry growth, ease compliance for businesses, and make a variety of essential products more affordable for consumers. This page offers a detailed overview of the updated GST rates and their implications across clothing, footwear, textile materials, and tailoring services.
New GST rates on clothes, apparel, and textiles (after September 22, 2025)
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Category Product/Service Old GST rate New GST rate Remarks Apparel and Clothing Priced up to Rs. 2,500 per item 5% (previously applicable up to Rs. 1,000) 5% New, higher threshold to make more garments affordable. Priced above Rs. 2,500 per item 12% 18% Shifted into the new standard tax slab. Footwear Priced up to Rs. 2,500 per pair 5% (previously applicable up to Rs. 1,000) 5% New threshold to rationalise taxes and benefit consumers. Priced above Rs. 2,500 per pair 12% 18% Shifted into the new standard tax slab. Textile materials Cotton, Silk, Jute, etc. 5% 5% Rate remains unchanged. Manmade fibres and yarns Varied, often higher Reduced Rate Intended to address the inverted duty structure. Services Tailoring and job work 18% 5% Significant reduction to support small businesses and consumers.
GST rates on clothes and apparel
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Below is a table summarising the GST rates applicable to various categories of clothes and apparel in India:
Category Details Old GST rate New GST rate Silk and jute products Natural silk and jute fibres Exempt Exempt Fabrics All types of fabrics, both natural and synthetic 5% 5% Apparel Apparel priced at or below Rs. 2,500 per item 5% (previously up to Rs. 1,000) 5% Apparel Apparel priced above Rs. 2,500 per item 12% 18% Footwear Footwear priced at or below Rs. 2,500 per pair 5% (previously up to Rs. 1,000) 5% Footwear Footwear priced above Rs. 2,500 per pair 18% 18% Services Textile job work (including embroidery, weaving, knitting, etc.) 18% 5% Accessories Garment accessories (such as belts, ties, scarves, etc.) 12% 18%
GST rate on textile materials
All types of clothing and apparel priced up to Rs. 2,500 are subject to a lower GST rate of 5%. Conversely, a higher GST rate of 18% applies to textile products and apparel when the price is above Rs. 2,500.
| Sr. No | Items | HSN code | Old GST rate | New GST rate |
| 1 | Silk yarn | 5004 to 5006 | 5% | 5% |
| 2 | Woven fabrics of silk or silk waste | 5007 | 5% | 5% |
| 3 | Garneted stock of wool, fine or coarse animal hair, shoddy wool | 5104 | 5% | 5% |
| 4 | Wool and fine or coarse animal hair, carded or combed | 5105 | 5% | 5% |
| 5 | Yarn of wool or animal hair | 5106 to 5110 | 5% | 5% |
| 6 | Woven fabrics of wool or animal hair | 5111 to 5113 | 5% | 5% |
| 7 | Cotton and cotton waste | 5201 to 5203 | 5% | 5% |
| 8 | Cotton sewing thread | 5204 | 5% | 5% |
| 9 | Cotton yarn (other than khadi yarn) | 5205 to 5207 | 5% | 5% |
| 10 | Woven fabrics of cotton | 5208 to 5212 | 5% | 5% |
| 11 | Flax, raw or processed; flax tow and waste | 5301 | 5% | 5% |
| 12 | Textile bast fibres (other than jute) | 5303 | 5% | 5% |
| 13 | All goods including yarn of flax, jute, other bast fibres | 5305 to 5308 | 5% | 5% |
| 14 | Woven fabrics of vegetable textile fibres, paper yarn | 5309 to 5311 | 5% | 5% |
| 15 | Woven fabrics of man-made textile materials | 5407, 5408 | 5% | 5% |
| 16 | Woven fabrics of man-made staple fibres | 5512 to 5516 | 5% | 5% |
| 17 | Real zari thread (gold) and silver thread | 5600, 5605, 5610 | 5% | 5% |
| 18 | Jute twine, coir cordage or ropes | 5607 | 5% | 5% |
| 19 | Knotted netting of twine, cordage or rope | 5608 | 5% | 5% |
| 20 | Products of coir | 5609 | 5% | 5% |
| 21 | Coir mats, matting, floor covering and handloom durries | 5702, 5703, 5705 | 5% | 5% |
| 22 | Narrow fabrics assembled by adhesive (bolducs) | 5806 | 5% | 5% |
| 23 | All goods of knitted or crocheted fabrics | 60 | 5% | 5% |
Tailoring services and clothing rentals are charged a GST rate of 5% under HSN code 9988.
Furthermore, the composition scheme is available for businesses supplying clothing, provided their annual turnover does not exceed ₹1.5 crore (or ₹75 lakhs in the northeastern states). For businesses engaged in clothing rental or stitching services, the turnover limit for the composition scheme is ₹50 lakhs
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Taxability of GST on clothes and textiles
The sale of clothes, whether stitched or unstitched, is taxable under GST as it falls within the scope of supply. However, raw jute and raw silk are taxed at a nil rate, so if you deal in raw jute or raw silk, or run mills, there is no need to register under GST or pay taxes.
Buyers of raw cotton must pay GST at 5% on a reverse charge basis. Tailoring services and renting of clothes also attract GST. However, the composition scheme is available for the supply of clothes if the annual turnover is up to Rs. 1.5 crore (Rs. 75 lakhs in north-eastern states). The limit for cloth renting or stitching services is Rs. 50 lakhs.
For 'Buy one, get one free' offers, GST is not charged on the items given without payment. Also, input tax credit is not available for these items.
Importance of the apparel industry to India
The apparel industry is a vital sector of the Indian economy, significantly contributing to employment, export earnings, and economic growth. As one of the largest producers of textiles and garments globally, India has a rich heritage in textile production, with the industry deeply rooted in the cultural fabric of the country.
Employment is one of the key areas where the apparel industry plays a crucial role. It is the second-largest employer in India, providing livelihoods to millions, especially women and rural populations. This industry encompasses a wide range of activities, from cotton cultivation to fabric production and garment manufacturing, creating diverse employment opportunities.
Exports form a significant part of the apparel industry's contribution to the economy. Indian garments are in high demand across international markets due to their quality and craftsmanship. The sector's export earnings help in balancing the country's trade deficit and strengthening the economy.
The apparel industry also plays a pivotal role in rural development. Many of the textile units are located in rural areas, providing employment and improving the living standards of people in these regions. This decentralised nature of the industry promotes inclusive growth and reduces regional disparities.
GST rules have further streamlined the sector, making it more organised and competitive. The introduction of GST has simplified the tax structure, reduced compliance costs, and enhanced ease of doing business, contributing to the industry's overall growth and sustainability.
How to calculate GST on clothes?
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Calculating GST on clothes is straightforward but requires an understanding of the applicable rates based on the value of the apparel. Here is a step-by-step guide to help you calculate GST on clothes:
- Determine the value of the apparel: Identify whether the garment's price is up to Rs. 2,500 or exceeds this amount. This is crucial as the GST rates differ based on this new threshold.
- Identify the applicable GST rate:
- For clothes priced up to Rs. 2,500, the GST rate is 5%.
- For those priced above Rs. 2,500, the rate is 18%.
- Calculate the GST amount: Multiply the value of the apparel by the applicable GST rate.
- For instance, if a garment is priced at Rs. 2,000, the GST amount would be Rs. 2,000 * 5% = Rs. 100.
- If the garment is priced at Rs. 3,000, the GST amount would be Rs. 3,000 * 18% = Rs. 540.
- Add the GST amount to the base price: To get the final price, add the GST amount to the base price of the garment.
- For the Rs. 2,000 garment, the final price would be Rs. 2,000 + Rs. 100 = Rs. 2,100.
For the Rs. 3,000 garment, the final price would be Rs. 3,000 + Rs. 540 = Rs. 3,540.
Using a GST calculator can simplify this process, ensuring accuracy and saving time. These calculators are readily available online and can handle multiple entries, making them a useful tool for businesses.
To gain more insight into the features of GST and how they apply to various industries, it is beneficial to explore the specifics of how the GST system works.
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Latest GST regulation changes for the clothing industry (2025)
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The GST Council has introduced a revised tax structure, effective from 22 September 2025, addressing several long-standing concerns within the industry. This new framework is designed to simplify compliance, rectify tax imbalances, and enhance the global competitiveness of India’s textile and apparel sectors.
Key changes introduced:
- Rationalisation of tax slabs: The GST Council has officially removed the 12% and 28% tax slabs, consolidating most items under a simplified two-rate system of 5% and 18%. This marks a major step towards streamlining the tax regime.
- Correction of inverted duty structure: To address the issue of higher taxation on raw materials than on finished products, the GST on man-made fibres and yarns has been reduced. This rectifies the earlier inverted duty structure and supports smoother supply chains.
- Reduced GST on tailoring services: The GST rate on tailoring and job work services has been lowered from 18% to 5%. This offers considerable relief to small tailoring units and enhances affordability for customers.
- Revised price thresholds for apparel and footwear: The threshold for the 5% GST rate has been increased from Rs. 1,000 to Rs. 2,500 for both apparel and footwear. This move makes a broader range of products more accessible to consumers. Items priced above Rs. 2,500 will now attract 18% GST.
While the Apparel Export Promotion Council (AEPC) has proposed various incentives and export-focused measures, the above changes represent the officially approved reforms announced by the GST Council.
Conclusion
The implementation of GST has brought about a significant transformation in the apparel industry in India. By simplifying the tax structure and standardising rates, GST has made it easier for businesses to comply with regulations and for consumers to understand the pricing. The apparel industry, being a major contributor to employment and exports, has benefited from these changes, fostering growth and competitiveness. Businesses looking to expand in this sector can also consider availing of business loans to manage their working capital and invest in growth opportunities.
The streamlined tax regime under GST and the availability of financial support through business loans are pivotal for sustaining the momentum of growth in the apparel industry.
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Frequently Asked Questions
Overview
What is the GST rate for clothes?
The GST rate for clothes now depends on their price based on a new, simplified two-slab system. Apparel priced up to Rs. 2,500 per piece is subject to a 5% GST rate, while those priced above Rs. 2,500 are now taxed at 18%. This is a significant change from the old Rs. 1,000 threshold and the 12% rate.
What is the GST bill for clothes?
A GST bill for clothes is an invoice detailing the purchase, the base price of the garments, and the applicable GST. With the new rates, the GST on the bill will be either 5% for items up to Rs. 2,500 or 18% for items above Rs. 2,500. This ensures transparent pricing and compliance with the updated GST regulations.
What are the GST rates for garments (stitched or readymade clothes)?
The new GST rates for all garments, including stitched and readymade clothes, are now 5% for items priced up to Rs. 2,500 per piece. For garments priced above Rs. 2,500, the GST rate is now 18%.
Can I claim GST on clothes?
Yes, a GST-registered business can claim Input Tax Credit (ITC) on the GST paid for clothes if they are purchased for resale or other business purposes. This includes GST paid on raw materials, packaging, and other items used in the manufacturing and supply chain. However, ITC cannot be claimed on clothes purchased for personal use.
Is there GST on baby clothes?
Yes, baby clothes are subject to GST. They fall under the general apparel category. The GST rate for baby clothes will be either 5% or 18% depending on the price per piece, following the same new thresholds as other garments.
What is the GST rate for cloth sale?
Under the new GST regime, cloth sales are subject to a 5% GST if the price is up to Rs. 2,500 and an 18% GST if the price is above Rs. 2,500.
What is the GST rate on cotton clothes?
Raw cotton remains subject to GST, which is generally 5% and paid on a reverse charge basis by the buyer. For finished cotton clothes, the new GST rate is 5% for items priced up to Rs. 2,500 and 18% for those priced above Rs. 2,500.
Can we claim GST on clothes?
Yes, if you are a GST-registered business (manufacturer, wholesaler, or retailer), you can claim ITC on the GST paid for raw materials, packaging, and other inputs used to make the clothes. However, you cannot claim ITC on personal purchases or overhead costs like rent or electricity.
Is GST charged on clothes below Rs. 1,000?
Yes, a 5% GST is charged on clothes priced below Rs. 1,000. Under the new rules, this 5% rate now applies to all clothes up to the higher threshold of Rs. 2,500.
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