--- title: "New GST on Readymade Clothes 2026: 5% / 18% Rate on Ready-to-Wear" description: "New GST rate on readymade clothes in 2026 is 5% up to Rs.2,500 and 18% above Rs.2,500. Get GST-ready with Busy and apply the correct rate on every invoice." canonical: "https://busy.in/gst-rates/readymade-clothes/" author: "Hitesh Aggarwal" published: "2025-05-15T10:15:31.000Z" category: "GST Rates" --- - GST on readymade clothes depends on the value of the garment. Items up to **₹2,500 per piece attract 5% GST**, while items above ₹2,500 attract **18% GST**. - Earlier, readymade garments up to **₹1,000 per piece attracted 5% GST**, while garments above ₹1,000 attracted **12% GST**. - Branding does not determine the GST rate; the applicable rate depends on the garment value and classification. - Clothing businesses must register for GST if they cross the applicable turnover threshold and comply with GST filing requirements. - Online and offline clothing sales follow the same GST rules, with eCommerce platforms applying applicable GST provisions. # New GST on Readymade Clothes: Tax by Fabric and Price 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. ## New GST Rate on Readymade Clothes The revised GST rates applicable from **22 September 2025** are provided below for readymade garments (Chapters 61/62) with no compensation cess. | Sale Price Per Piece | New GST Rate | | --- | --- | | Up to ₹2,500 | **5%** | | Above ₹2,500 | **18%** | **Note:** Under the revised GST structure, the earlier ₹1,000 threshold has been replaced with a ₹2,500 per piece threshold. Readymade garments priced up to ₹2,500 attract 5% GST, while garments above ₹2,500 attract 18% GST. ## What is Meant by Readymade Clothes? Readymade clothes are garments that are already stitched and available for sale in finished form. These include: - Shirts, trousers, kurtas - Dresses, jeans, suits - Uniforms, jackets, and more Unlike fabric sold by the meter, readymade clothes are taxed based on the final selling price of the complete garment. **Get a Free Trial –** [**Best Accounting Software For Small Business**](https://busy.in/accounting-software/) ## Old GST Rate on Readymade Clothes ### (Old GST Rates – Applicable Until 21st September) | 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%. **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 Readymade Clothes Stock Automatically Trusted by 6,00,000+ Users 4.6 Google Rating \* No credit card required ## Does Fabric Type Affect GST? 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. ## **GST on Branded vs. Unbranded Clothes** There is no difference in the GST rate based on branding. Whether it’s a local label or a big fashion brand, the GST rate depends on the **sale price per piece and applicable classification**. Under the revised GST structure, readymade garments up to **₹2,500 per piece attract 5% GST**, while garments above **₹2,500 attract 18% GST**. Branded garments may fall into the higher GST slab if their price exceeds the applicable threshold. ## GST Compliance for Clothing Businesses - Register for GST if your turnover exceeds ₹40 lakh - Charge GST at the applicable rate on every sale - File monthly or quarterly returns based on turnover - Use GST-compliant invoices with HSN codes (typically 6101–6208) **Explore a Free Demo of –** [**Best Inventory Management Software For Small Business**](https://busy.in/accounting-software/inventory-management/) ## Online vs. Offline Sales Whether you’re selling from a store or an online platform, **gst on readymade clothes** applies the same way. - GST registration is mandatory for eCommerce sellers, regardless of turnover - Platforms like Amazon or Flipkart deduct and remit GST on your behalf - You must still file returns and claim [Input Tax Credit (ITC)](https://busy.in/gst/what-expenses-can-be-claimed-as-itc/) where applicable ## Conclusion Knowing how **gst on readymade clothes** is calculated helps both consumers and businesses make better pricing decisions and stay compliant with tax rules. ## 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 readymade clothes under ₹1,000? It's **5%** if the price per piece is **₹2,500 or less**. ### What if the MRP is ₹1,200 but the discounted price is ₹999? The GST rate is determined based on the applicable value and classification of the garment. Since the price per piece is within the **₹2,500 threshold**, the applicable GST rate is **5%**. ### Do children's garments have a different GST rate? No. All readymade clothes follow the same GST slab based on price. ### Is GST different for cotton vs. polyester garments? No. Fabric type does not affect GST on finished garments. ### Can boutiques claim Input Tax Credit on fabric and tailoring services? Yes, if they are GST-registered and use these inputs for making and selling clothes. ## 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/)