--- title: "New GST in Garments 2026: 5% / 18% Rate on Readymade Garments" description: "New GST rate on garments in 2026 is 5% up to Rs.2,500 and 18% on garments above Rs.2,500. Busy helps you apply the right GST rate on every invoice." canonical: "https://busy.in/gst-rates/garments/" author: "Madan Murari" published: "2025-04-23T11:27:12.000Z" category: "GST Rates" --- - New GST rates effective after September 22, 2025, will have two GST rates 5% or 18%, depending on the price. - The GST rate applies to all types of clothing, including ready-made garments, sarees, and designer outfits. - Businesses benefit from GST through simplified operations and the ability to claim Input Tax Credit, though they face challenges like the inverted duty structure. - GST affects clothing pricing by increasing the final sale price based on the GST rate applied to the selling price. # New GST on Garments and Apparel in India If you’re buying or selling clothes in India, knowing how **GST on clothes** works is super important. From everyday wear to designer outfits, garments are taxed based on their price. Let’s simplify how it all works. **Get a Free Trial –** [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/) ## **New GST on Clothing in India** Under the revised GST structure effective from 22 Sep 2025, ready-made garments are generally taxed at 5% if the sale value does not exceed Rs 2,500 per piece, and at 18% if it exceeds Rs 2,500 per piece. Worn clothing and used textiles under HSN 6309/6310 generally remain subject to 5% or 18% GST. ## GST Rate on Clothing | Clothing Type | HSN Code | Sale Value | New GST Rate (After 22 Sep 2025) | Old GST Rate (Before 22 Sep 2025) | | --- | --- | --- | --- | --- | | Knitted or crocheted garments such as T-shirts, sweaters, innerwear | 61 | Up to Rs 2,500 per piece | 5% | 5% up to Rs 1,000 per piece | | Knitted or crocheted garments such as T-shirts, sweaters, innerwear | 61 | Above Rs 2,500 per piece | 18% | 12% above Rs 1,000 per piece | | Not knitted or crocheted garments such as shirts, trousers, dresses, saree blouses | 62 | Up to Rs 2,500 per piece | 5% | 5% up to Rs 1,000 per piece | | Not knitted or crocheted garments such as shirts, trousers, dresses, sarees | 62 | Above Rs 2,500 per piece | 18% | 12% above Rs 1,000 per piece | ## **GST on Readymade Garments** **Readymade garments GST rate** follows the same 5% and 18% structure. Whether you’re buying from a mall or selling online, if the selling price is: - **Up to ₹2500**, the GST is 5% - **Above ₹2500**, the GST becomes 18% So, if you’re buying a ready-to-wear shirt for ₹950, you’ll pay **5% GST on clothes below 1000**. If it’s ₹3,200, the rate increases to 18%. **Get a Free Trial –** [**Best GST Accounting Software For Small Business**](https://busy.in/accounting-software/gst-accounting/) Live Demo Available Today ## Track Size-Wise Garment Stock Across Your Retail Stores Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## **GST on Clothing: Business Perspective** From a business view, GST has simplified operations: - Sellers can [**claim Input Tax Credit**](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) on raw materials like fabric, thread, and buttons - Taxation is uniform across India - Filing is easier through online GST returns 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**](https://busy.in/accounting-software/inventory-management/) ## **How to Calculate GST on Clothing** Because the rate depends on the sale value per piece, the same clothing category can fall into different tax outcomes depending on price. ### **Example 1: Garment within 5% slab** Suppose you sell a cotton kurta for **Rs 950**. **GST @ 5% = Rs 47.50** **Final Price = Rs 997.50** ### **Example 2: Garment still within 5% slab after the update** Suppose you sell a shirt for **Rs 2,200**. **GST @ 5% = Rs 110** **Final Price = Rs 2,310** ### **Example 3: Garment in 18% slab** Suppose you sell a designer dress for **Rs 3,000**. **GST @ 18% = Rs 540** **Final Price = Rs 3,540** ## **Unique Features Of BUSY Accounting Software For the Garment Industry** - Style-wise [**inventory management**](https://busy.in/accounting-software/inventory-management/) for tracking SKUs by size, colour, and design. - Multiple units of measurement (UOM) support for meters, pieces, or sets. - [**Barcode generation**](https://busy.in/gst/generation-of-qr-code-for-an-e-invoice/) and scanning for fast and accurate billing. - Godown-wise stock management for different warehouses or outlets. - MRP and discount handling for retail and wholesale pricing strategies. - Garment-specific [**billing formats**](https://busy.in/busy-invoice-format/) , including size and colour breakup. - Job work and subcontracting module for tracking outsourced stitching or embroidery. - Real-time stock reports with variant-wise availability. - Sales analysis by brand, category, or style for better decision-making. ## Unique Features Of BUSY Accounting Software For the Garment Industry - Style-wise [**inventory management**](https://busy.in/accounting-software/inventory-management/) for tracking SKUs by size, colour, and design. - Multiple units of measurement (UOM) support for meters, pieces, or sets. - [**Barcode generation**](https://busy.in/gst/generation-of-qr-code-for-an-e-invoice/) and scanning for fast and accurate billing. - Godown-wise stock management for different warehouses or outlets. - MRP and discount handling for retail and wholesale pricing strategies. - Garment-specific [**billing formats**](https://busy.in/busy-invoice-format/) , including size and colour breakup. - Job work and subcontracting module for tracking outsourced stitching or embroidery. - Real-time stock reports with variant-wise availability. - Sales analysis by brand, category, or style for better decision-making. ## About the author **Madan Murari** Hi there! I’m a Chartered Accountant with over 20 years of experience in financial accounting and a passion for writing. I enjoy simplifying complex topics like GST and income tax, believing that learning should be a lifelong journey. I'm here to share insights and make financial matters easier for everyone! ## Frequently asked questions ### Does GST apply to all types of clothes? Generally, yes. Most garments and apparel attract GST, but the rate depends on the HSN classification and the per-piece sale value. For ordinary garments, the main structure is 5% up to Rs 2,500 per piece and 18% above that. ### Is GST included in MRP? Usually, yes. In normal retail sales, the declared retail price is generally GST inclusive. But GST liability is worked out on the transaction value, so the invoice breakup should still be checked. ### Is tailoring service also taxed? Yes. Tailoring services are generally taxable at 5% GST. ### What is the GST rate for clothes over Rs 2500? After 22 Sep 2025, garments are generally taxed at 5% up to Rs 2,500 per piece and at 18% above Rs 2,500 per piece. ## 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/)