If you’re buying or selling clothes in India, knowing how GST in garments works is super important. From everyday wear to designer outfits, garments are taxed based on their price. Let’s simplify how it all works.
The GST rate on garments depends on their sale value per piece:
This rule applies to most kinds of clothing, including readymade garments, sarees, trousers, shirts, and more.
Get a Free Trial – Best Accounting Software For Small Business
Each type of clothing is classified under a code called HSN (Harmonized System of Nomenclature). Here’s how garments GST rate is applied based on these codes:
Clothing Type | HSN Code | Sale Price | GST Rate |
---|---|---|---|
Knitted or crocheted garments (e.g., T-shirts, sweaters) | 61 | Up to ₹1,000 | 5% |
Above ₹1,000 | 12% | ||
Not knitted or crocheted (e.g., trousers, shirts, dresses) | 62 | Up to ₹1,000 | 5% |
Above ₹1,000 | 12% | ||
Worn clothing and used textiles | 6309/6310 | Any price | 5% |
Note: The price considered is the transaction value (the price you actually sell it at), not the printed MRP.
Readymade garments GST rate follows the same 5% and 12% structure. Whether you’re buying from a mall or selling online, if the selling price is:
So, if you’re buying a ready-to-wear shirt for ₹950, you’ll pay 5% GST on clothes below 1000. If it’s ₹1,200, the rate increases to 12%.
Get a Free Trial – Best GST Accounting Software For Small Business
From a business view, GST has simplified operations:
But, there’s one challenge — inverted duty structure. Sometimes, raw materials are taxed higher than finished garments, which means businesses may have to claim refunds.
Explore a Free Demo of – Best Inventory Management Software For Small Business
Let’s say you sell a cotton kurta:
Now for a designer dress: