New GST for Silk Sarees and Traditional Apparel: HSN Code and Rates
Silk sarees are more than just clothing in India—they’re a symbol of tradition, culture, and heritage. Whether it’s a Kanjivaram, Banarasi, or handloom silk saree, these garments are widely bought for festivals, weddings, and celebrations. But what GST rate applies when you buy or sell a silk saree?
Let’s break down the complete GST structure on silk sarees and traditional ethnic wear in India.
New GST Rate on Silk Sarees in India
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for silk sarees and related silk fabrics (no compensation cess).
| Type of Saree/Apparel | HSN Code | New GST Rate |
|---|---|---|
| Silk sarees (pure or blended) | 5007 | 5% |
| Handloom silk sarees (unbranded) | 5007 | 5% |
| Branded / trademarked silk sarees | 5007 | 5% |
| Silk fabrics or materials (for saree making) | 5007 | 5% |
Note: Sarees are classified by constituent fibre (e.g., silk under HSN 5007) and remain at 5% under the updated slabs. The garment price threshold (≤/> ₹2,500) applies to Chapter 61/62 apparel, not to sarees classified as silk fabrics.
Old GST Rate on Silk Sarees in India
(Old GST Rates – Applicable Until 21st September)
| Type of Saree/Apparel | HSN Code | GST Rate |
|---|---|---|
| Silk sarees (pure or blended) | 5007 | 5% |
| Handloom silk sarees (unbranded) | 5007 | 5% |
| Branded/trademarked silk sarees | 5007 | 5% |
| Silk fabrics or materials | 5007 | 5% |
So, the standard gst rate on silk sarees is 5%, regardless of whether they are machine-made, handloom, or artisanal—as long as they are not sold under a composite value-added apparel model.
GST on Handloom Silk Sarees
Although handloom products receive certain exemptions, handloom silk sarees are taxable at 5% if sold by:
- Registered sellers
- Branded outlets
- Online platforms
If sold by individual weavers or co-operative societies directly to customers, and if the turnover is below the threshold limit (₹40 lakh), GST registration may not be required, making them effectively GST-free in practice.
GST on Silk Fabrics and Dress Material
If you’re buying or selling raw silk fabric, silk borders, or unstitched dress material, the GST slab is still:
- 5% on silk yarn and fabric (HSN 5004, 5005, 5006)
However, if stitched or converted into tailored garments, they may fall under higher GST slabs of 12% or 18%.
Input Tax Credit (ITC) for Silk Saree Sellers
GST-registered sellers of silk sarees can claim Input Tax Credit on:
- Yarn and fabric purchases
- Tailoring or embroidery charges
- Packaging and logistics
- Rent and marketing services
Even though the output tax is 5%, Input Tax Credit (ITC) helps offset input expenses, making compliance beneficial for saree retailers and wholesalers.
Understanding the gst for silk sarees and traditional apparel helps buyers know what they’re paying for—and helps sellers stay compliant while keeping pricing competitive. Whether you’re a boutique owner or a weaver, knowing the correct GST slab ensures your business is both culturally rich and tax-smart.
As a Chartered Accountant with more than 8 years of experience, I have refined my skills in the field and developed a true passion for writing. I specialize in creating insightful content on topics such as GST, income tax, audits, and accounts payable. By focusing on delivering information that is both engaging and informative, I aim to share valuable insights that resonate with readers.
Frequently Asked Questions
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What is the GST rate on silk sarees in India?It is 5%, applicable to all silk sarees including handloom and branded varieties.
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Are handloom silk sarees exempt from GST?No. If sold by GST-registered sellers, handloom silk sarees attract 5% GST. Only unregistered weavers may sell without GST.
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What is the GST on silk fabric or yarn?Silk yarn and fabric are taxed at 5%, under HSN 5004 to 5007.
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Can saree sellers claim ITC on purchases?Yes. Registered sellers can claim ITC on yarn, transport, marketing, etc., if GST-compliant invoices are issued.
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Is GST applicable on silk sarees sold online?Yes. All online sales, including platforms like Amazon or Myntra, must charge 5% GST.