New GST on Readymade Clothes: Tax by Fabric and Price
- The gst on readymade garments depends on the value of the garment. Items up to ₹2,500 per piece attract 5% GST, while items above ₹2,500 per piece 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.
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.
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| Sale Price Per Piece | New GST Rate (After 22 Sep 2025) | Old GST Rate (Before 22 Sep 2025) |
|---|---|---|
| Up to ₹2,500 | 5% | 5% (up to ₹1,000 per piece) |
| Above ₹2,500 | 18% | 12% (above ₹1,000 per piece) |
Sale Price Per Piece
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Sale Price Per Piece
New GST Rate (After 22 Sep 2025)
Old GST Rate (Before 22 Sep 2025)
Note: Under the revised GST structure, the earlier ₹1,000 per piece 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.
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Does Fabric Type Affect GST?
For readymade garments, the GST rate is generally determined by the sale value per piece and applicable classification, not the fabric type. Whether the garment is made from cotton, polyester, wool, or silk does not change the GST rate for finished garments.
For manufacturers, the GST rate on fabric and other inputs depends on the specific product classification. For finished garments sold to customers, the applicable GST rate depends on the sale value per piece and applicable GST classification.
GST on Branded vs. Unbranded Clothes
Branding alone does not determine the GST rate. Whether a garment is sold under a local label or a premium brand, the applicable GST rate depends on the sale price per piece and classification.
Under the revised GST structure, readymade garments up to ₹2,500 per piece attract 5% GST, while garments above ₹2,500 per piece attract 18% GST.
Branded garments may fall into the higher GST slab if their sale 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)
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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) 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.
