New GST on Fabric: Yarn to Finished Textile Overview
- The gst on fabric depends on the type of fabric, HSN classification, and applicable GST provisions.
- Many fabrics, including cotton and man-made textile fabrics under applicable headings, attract 5% GST.
- Fabrics are classified under different textile categories, and the applicable fabric GST rate depends on their composition and HSN classification.
- Cotton fabrics and blended fabrics attract GST based on their composition, applicable textile heading, and GST provisions.
- Businesses must register for GST when they meet the applicable registration requirements.
- Eligible businesses can claim Input Tax Credit (ITC) on taxable supplies, subject to GST conditions.
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.
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New GST Rate on Fabric in India
The fabric GST rate depends on the type of fabric, HSN classification, and applicable GST provisions. Many fabrics, including cotton, silk, woollen, and synthetic textile fabrics under applicable headings, attract 5% GST.
The applicable GST rate is determined based on the material composition, textile category, and relevant HSN classification. Below are common fabric categories and their applicable GST rates.
| 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% |
Fabric Type
HSN Code
New GST Rate (After 22 Sept 2025)
Old GST Rate (Before 22 Sept 2025)
Fabric Type
HSN Code
New GST Rate (After 22 Sept 2025)
Old GST Rate (Before 22 Sept 2025)
Fabric Type
HSN Code
New GST Rate (After 22 Sept 2025)
Old GST Rate (Before 22 Sept 2025)
Fabric Type
HSN Code
New GST Rate (After 22 Sept 2025)
Old GST Rate (Before 22 Sept 2025)
Fabric Type
HSN Code
New GST Rate (After 22 Sept 2025)
Old GST Rate (Before 22 Sept 2025)
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GST on Cotton Fabric
Cotton fabrics attract GST based on their composition and applicable HSN classification. The gst on fabric for cotton textile products covered under the relevant headings is generally 5%.
- Pure cotton fabrics – 5% GST, where covered under the applicable classification
- Cotton blends – GST depends on the fibre composition and applicable HSN classification
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GST on Polyester Fabric
GST on polyester fabric depends on the applicable HSN classification and composition. Polyester fabrics covered under the relevant textile headings generally attract 5% GST.
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GST for Fabric Businesses
- GST registration requirements depend on the applicable turnover threshold, business type, and state-specific provisions. The threshold is not universally ₹40 lakhs for all fabric businesses.
- Businesses must charge GST at the applicable rate based on the fabric type, HSN classification, and GST provisions.
- Eligible registered businesses can claim Input Tax Credit (ITC) on inputs such as yarn, dyes, packaging materials, and other eligible purchases, subject to GST conditions.
However, small weavers and handloom workers may fall under applicable exemption thresholds and may not be required to register under GST, depending on their turnover and applicable GST provisions.
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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.
