BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.
Yarn is the backbone of the textile and apparel industry—used in weaving, knitting, sewing, and embroidery. With GST applied across various textile stages, understanding the tax on yarn is important for manufacturers, exporters, and small weavers alike. This blog breaks down the yarn GST rate in India based on type: cotton, synthetic, silk, coir, and dyed yarns.
Yes. All types of yarn are taxable under GST (Goods and Services Tax), though rates differ based on material and processing level. Yarn is classified under Chapter 50–56 of the HSN Code, which includes:
| Yarn Type | HSN Code | GST Rate |
|---|---|---|
| Cotton yarn (unbranded) | 5205 | 5% |
| Cotton yarn (branded/retail) | 5205 | 12% |
| Synthetic yarn (polyester, viscose) | 5402 / 5509 | 12% |
| Silk yarn | 5004 | 5% |
| Coir yarn | 5308 | 5% |
| Blended yarn | Varies | 12% |
| Dyed yarn (all categories) | Respective HSN | 12% |
Unbranded cotton yarn: 5% – mostly used in traditional weaving
Branded cotton yarn: 12% – applies to retail or packaged yarn
Hand-spun khadi yarn: Exempt – covered under GST exemption for khadi
Silk yarn: 5% – supports heritage and luxury weaving
Coir yarn: 5% – widely used in matting and home textiles
Jute yarn: Exempt – due to agricultural relevance
Get a Free Demo – Best Billing and Invoicing Software
Yarn dyeing services are taxed at 18% under SAC code 9988 as job work. This is separate from the tax on yarn itself, which may be 5% or 12%.
Understanding the yarn GST rate is essential for weavers, textile exporters, and traders across India. It enables proper GST-compliant invoicing, reduces cost via ITC, and ensures pricing accuracy from loom to market.
Get a Free Trial – Best Accounting Software For Small Business
BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.