Yarn New GST Rate: Cotton, Synthetic, and Blends
- Yarn is taxable under GST, with rates varying based on the type and processing stage.
- From 22 September 2025, the GST on yarn is generally 5% for major categories such as cotton, silk and man-made yarn, subject to the applicable HSN classification.
- Cotton and silk yarn were already taxed at 5%, while man-made yarn was reduced from 12% to 5% from 22 September 2025.
- Yarn dyeing and other textile processing carried out as eligible job work under SAC Heading 9988 generally attract 5% GST; other processing arrangements may attract a different rate depending on the nature of the supply.
- Yarn traders and manufacturers must register for GST once their aggregate turnover crosses the applicable registration threshold, subject to the nature of supply, state and other GST conditions.
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.
Apply GST correctly on yarn sales
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Is Yarn Taxable Under GST?
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:
- Cotton yarn
- Wool, silk, jute, and flax yarn
- Synthetic yarn (polyester, nylon)
- Coir yarn
- Blended and dyed yarn
New GST Rate on Yarn in India
The Government revised GST rates for several textile products from 22 September 2025. Man-made yarn was reduced from 12% to 5%, while major natural-fibre yarns such as cotton and silk generally continue at 5%.
New GST Rate on Yarn in India: At a Glance
| Yarn Type | HSN Code | GST Rate From 22 Sep 2025 | Rate Before 22 Sep 2025 |
|---|---|---|---|
| Cotton yarn | 5205–5207 | 5% | 5% |
| Silk yarn | 5004–5006 | 5% | 5% |
| Coir yarn | 5308 | 5% | 5% |
| Synthetic/artificial filament yarn, including polyester or viscose rayon | 5401–5406, as applicable | 5% | 12% |
| Man-made staple-fibre yarn | 5508–5511 | 5% | 12% |
| Blended yarn | Depends on fibre composition and classification | Depends on applicable HSN; commonly 5% for covered yarn headings | 5% or 12%, depending on classification |
| Dyed yarn | Respective yarn HSN | Rate applicable to the classified yarn | Rate applicable to the classified yarn |
Yarn Type
HSN Code
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Yarn Type
HSN Code
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Yarn Type
HSN Code
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Yarn Type
HSN Code
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Yarn Type
HSN Code
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Yarn Type
HSN Code
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
Yarn Type
HSN Code
GST Rate From 22 Sep 2025
Rate Before 22 Sep 2025
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Cotton Yarn GST Rate
- Unbranded cotton yarn: 5% GST
- Branded cotton yarn: 5% GST
- Hand-spun khadi yarn: Exempt (subject to applicable exemption conditions)
Synthetic and Blended Yarn GST Rate
- Polyester yarn: 5% GST
- Nylon yarn: 5% GST
- Blended yarn (cotton-poly): 5% GST
GST on Silk, Coir, and Jute Yarn
- Silk yarn: 5% GST
- Coir yarn: 5% GST
- Jute yarn: 5% GST
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GST on Yarn Dyeing Services
Yarn dyeing carried out as eligible textile job work under SAC Heading 9988 generally attracts 5% GST. Other processing arrangements may require separate classification depending on the nature of the supply.
GST Compliance for Yarn Traders & Manufacturers
Yarn traders and manufacturers should ensure proper GST compliance by:
- Registering for GST if applicable turnover thresholds are exceeded.
- Applying the correct 5% GST rate for yarn based on the applicable HSN classification.
- Using proper HSN codes for accurate classification and invoicing.
- Claiming eligible Input Tax Credit (ITC) on taxable inputs and input services such as raw materials, dyeing services and packaging, subject to GST rules.
- Filing regular GST returns such as GSTR-1 and GSTR-3B.
Understanding the correct yarn GST rate helps weavers, textile manufacturers, exporters, and traders maintain accurate invoicing, manage costs, and ensure GST compliance.
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