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If you’ve bought a shirt from a retail store or a kurta from an online shop, you’ve already paid GST on it. But how is it calculated? This guide breaks down everything you need to know about gst on readymade clothes, including pricing slabs, fabric type, and applicable tax rates.
Readymade clothes are garments that are already stitched and available for sale in finished form. These include:
Unlike fabric sold by the meter, readymade clothes are taxed based on the final selling price of the complete garment.
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| Sale Price Per Piece | GST Rate |
|---|---|
| Up to ₹1,000 | 5% |
| Above ₹1,000 | 12% |
So, if you’re buying a kurta for ₹950, the GST will be 5%. But if you buy a branded dress for ₹1,200, GST jumps to 12%.
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No. The type of fabric—whether cotton, polyester, wool, or silk—does not change the GST rate on readymade garments. The rate is determined strictly by the sale value of the garment.
That said, if you’re a manufacturer, the fabric you buy might have a different GST rate (usually 5%), but for finished garments sold to customers, the rate depends only on the price.
There is no difference in the GST rate based on branding. Whether it’s a local label or a big fashion brand, the tax is applied the same way—5% for items up to ₹1,000 and 12% for items above ₹1,000.
However, branded garments are often priced higher, so most of them fall into the 12% GST slab.
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Whether you’re selling from a store or an online platform, gst on readymade clothes applies the same way.
Knowing how gst on readymade clothes is calculated helps both consumers and businesses make better pricing decisions and stay compliant with tax rules.
BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.