--- title: "New GST on Fabric 2026: 5% / 18% Rate on Textile, Polyester" description: "New GST rate on fabric in 2026 is 5% to 18% on cotton, polyester, silk and all textile fabrics. Let Busy handle GST billing accurately on every transaction." canonical: "https://busy.in/gst-rates/fabric/" author: "Hitesh Aggarwal" published: "2025-05-15T10:09:56.000Z" category: "GST Rates" --- - The new GST rate for all fabric types, including cotton, silk, wool, synthetic, and denim, is 5% in India. - Previously, fabrics were also taxed at a uniform 5% GST rate to keep them affordable and within the GST system. - Cotton fabric, whether pure or blended with minor synthetics, remains at a 5% GST rate to support domestic handloom sectors. - Businesses with over ₹40 lakhs turnover must register for GST, charge 5% on sales, and can claim Input Tax Credit on higher-taxed inputs. # New GST on Fabric: Yarn to Finished Textile Overview From cotton sarees to polyester blends, fabric plays a vital role in India’s textile and fashion industries. Whether you’re a manufacturer, retailer, or consumer, knowing the **fabric HSN code and GST rate** works is important for pricing, tax compliance, and business decisions. ## New GST Rate on Fabric in India Fabrics are generally taxed at a uniform 5% GST rate, regardless of the material type. This low rate was introduced to keep fabrics affordable while still including them in the GST system. The Government of India has updated GST rates effective after 22 Sep 2025. Below are the expected new GST rates for common fabric types (no compensation cess). | Fabric Type | HSN Code | New GST Rate (After 22 Sept 2025) | Old GST Rate (Before 22 Sept 2025) | | --- | --- | --- | --- | | Cotton fabric | 5208–5212 | 5% | 5% | | Silk fabric | 5007 | 5% | 5% | | Woollen fabric | 5111–5113 | 5% | 5% | | Synthetic/Polyester fabric | 5407–5516 | 5% | 5% | | Denim fabric | 5209 | 5% | 5% | Get a Free Trial – [Best Accounting Software For Small Business](https://busy.in/accounting-software/) ## **GST on Cotton Fabric** Cotton is one of the most widely used textiles in India. The **cotton fabric gst rate** is 5%, whether it’s raw cotton fabric, printed cotton, or blended with a small amount of other fibers. - Pure cotton fabrics – 5% GST - Cotton blends (minor synthetic mix) – Still 5% **Get a Free Demo –** [**Best Billing and Invoicing Software**](https://busy.in/accounting-software/invoicing-and-gst-billing/) ## **GST on Polyester Fabric** **GST on polyester fabric** is also 5%, even though polyester is a synthetic, petroleum-based fiber. Earlier, polyester was taxed higher due to excise duties, but under GST, the rate was reduced to streamline input and output taxes. Live Demo Available Today ## Track Fabric Lot and Batch Numbers for Quality Control Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## **GST for Fabric Businesses** - GST registration is mandatory if turnover exceeds ₹40 lakhs - You must charge 5% GST on sales - You can [claim Input Tax Credit (ITC)](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) on yarn, dyes, packaging, etc., taxed at 18% However, many small weavers and handloom workers fall under the exemption threshold and are not required to register under GST. **Get a Free Trial –** [**Best GST Accounting Software For Small Business**](https://busy.in/accounting-software/gst-accounting/) ## **GST Return and Invoicing for Fabric** - Always issue GST-compliant invoices mentioning the HSN code and GST breakup - File regular returns (monthly or quarterly based on turnover) - Maintain stock and purchase records for ITC claims ## **How to Calculate GST on Fabric** For most fabrics, GST is generally **5%**. However, always confirm the exact HSN classification, as some special or technical fabrics may fall under a different rate. **GST Amount = Taxable Value × GST Rate** **Final Invoice Value = Taxable Value + GST Amount** ### **Example 1: Cotton fabric at 5%** Suppose the taxable value of cotton fabric is **Rs 10,000**. **GST = 10,000 × 5% = Rs 500** **Final Invoice Value = Rs 10,500** ### **Example 2: Polyester fabric at 5%** Suppose the taxable value of polyester fabric is **Rs 25,000**. **GST = 25,000 × 5% = Rs 1,250** **Final Invoice Value = Rs 26,250** ### **Example 3: Fabric roll sold to a retailer** Suppose the taxable value of a fabric roll is **Rs 50,000**. **GST = 50,000 × 5% = Rs 2,500** **Final Invoice Value = Rs 52,500** ## **Conclusion** By understanding how **gst on fabric** is applied, whether cotton, silk, or polyester, you can plan better, price right, and stay compliant. Whether you’re in retail or wholesale, these insights help you navigate GST smoothly. ## About the author **Hitesh Aggarwal** As a Chartered Accountant with over 12 years of experience, I am not only skilled in my profession but also passionate about writing. I specialize in producing insightful content on topics like GST, accounts payable, and income tax, confidently delivering valuable information that engages and informs my audience. ## Frequently asked questions ### What is the GST rate on fabric? The standard GST rate on fabric is 5% across all material types. ### Is cotton fabric taxed under GST? Yes, the cotton fabric GST rate is 5% under HSN codes starting from 5208. ### What about GST on polyester fabric? **GST on polyester fabric** is also **5%**, though polyester yarn may attract higher GST. ### Do handloom fabrics have special exemptions? While handloom fabric is taxed at 5%, small weavers with a turnover below ₹40 lakhs may be exempt from GST registration. ### Can fabric traders claim Input Tax Credit? Yes, but they must be GST-registered and ensure proper documentation for claiming ITC on inputs like yarn, dyes, etc. ## Related articles - [New GST on Skincare Products: Rate, Branding & Retail Pricing](https://busy.in/gst-rates/skincare-products/) - [New GST on Industrial Machinery: Slabs, ITC & MSME Effect](https://busy.in/gst-rates/industrial-machinery/) - [New GST on Restaurant Meals: Dine-in, Takeaway & Delivery Compared](https://busy.in/gst-rates/restaurant-meals/) - [New GST on Kitchen Utensils: What’s Taxed and What’s Not?](https://busy.in/gst-rates/kitchen-utensils/) - [New GST on Online Education: Rate, Exemptions & EdTech Impact](https://busy.in/gst-rates/online-education/) - [New GST on Packaging Materials: Tax Implication Across Industries](https://busy.in/gst-rates/packaging-materials/) - [New GST on Digital Marketing Services: Tax Rates & Input Credit Explained](https://busy.in/gst-rates/digital-marketing-services/) - [New GST on Pesticides: Rates, Agri-Exemptions & Sector Impact](https://busy.in/gst-rates/pesticides/) - [New GST on Butter: From Dairy to Dining – What You Pay](https://busy.in/gst-rates/butter/) - [GST on Honey: Rate, Applicability & Industry Outlook](https://busy.in/gst-rates/honey/)