Cloth HSN Code: Understanding HSN Classifications for Cloth Products
Cloth is sold in many forms such as plain cotton fabric, dress material and readymade garments. Shop owners, traders and manufacturers need to use the correct cloth HSN code so that GST on fabric and readymade cloth is charged properly.
In this guide you will learn how cloth is classified under HSN, how cotton cloth and readymade garments are grouped, how GST rates apply and how cloth manufacturers and traders use these codes in GST billing and returns.
What Is the Cloth HSN Code?
Under GST, there is no single HSN code that covers every type of cloth. The code changes based on whether you are dealing with fabric or ready to wear garments and also on the fibre content such as cotton, man made fibre or blended material.
Cotton fabrics are mainly classified in chapter fifty two which covers cotton. Woven cotton fabrics used as cloth for shirts, trousers, kurtas and bed sheets are commonly placed under headings like 5208, 5209 and 5210. These headings cover different weights and constructions of woven cotton cloth.
Fabrics made from man made fibre or synthetic yarn are placed in other chapters such as fifty four and fifty five. In practice, many cloth shops that focus on cotton suiting and shirting treat 5208 or 5209 as their base cloth HSN code for normal cotton fabric rolls.
Readymade garments are not classified as fabric. They are treated as articles of apparel in chapters sixty one and sixty two. These chapters have separate headings for shirts, trousers, saree blouses, dresses and other stitched items. So the HSN code for cloth in fabric form is different from the HSN code for a stitched garment made from that fabric.
| HSN Code | Product Description | Product Type or Variant | GST Rate |
|---|---|---|---|
| 5208 | Woven cotton fabrics | Unbleached, bleached, dyed or printed cotton cloth by metre | 5% |
| 5209 | Woven cotton fabrics | Medium and heavy woven cotton fabrics for shirting and suiting | 5% |
| 5210 | Woven cotton fabrics | Cotton blend woven fabrics containing less than 85% cotton | 5% |
| 6105 | Knitted shirts | Men or boys knitted or crocheted shirts and similar garments | 5% or 18% |
| 6205 | Woven shirts | Men or boys woven shirts and similar readymade garments | 5% or 18% |
| 6103 | Knitted garments | Men or boys suits, jackets, trousers and similar knitted wear | 5% or 18% |
| 6203 | Woven garments | Men or boys suits, jackets, trousers and similar woven wear | 5% or 18% |
HSN Code for Cotton Cloth and Readymade Cloth
Cotton cloth that is sold as fabric by the metre or in rolls usually falls under chapter fifty two. Woven fabrics of cotton that are unbleached, bleached, dyed or printed are covered in headings 5208, 5209 and 5210. The detailed six digit and eight digit codes inside these headings depend on the weight and type of weave but all of them sit inside the cotton fabric family.
If a trader mainly sells cotton fabric for making shirts, salwar suits or uniforms, it is common to use 5208 or 5209 as the base HSN code in the item master and invoices. This keeps all cotton cloth items under the correct cotton chapter for GST reporting.
Readymade cloth such as shirts, trousers, kurta sets and dresses is classified as apparel in chapters sixty one and sixty two. For example, many men shirts are placed under headings like 6105 or 6205 and trousers are under headings such as 6103 or 6203 depending on whether the garment is knitted or woven.
Because there are many styles and fabrics, there is no single readymade cloth HSN code. Instead, each type of garment uses its own apparel heading. Small retailers who do not split every style at the code level often treat their garments as readymade apparel under the correct apparel chapter and choose a common code for similar products in their billing software.
GST on Cloth and HSN Code Classification
The GST rate on cloth depends on both the HSN code and the price and type of the product. Basic cotton fabrics under headings such as 5208 and 5209 have been given a lower slab so that essential cloth remains affordable. In the present structure, woven cotton fabrics under these headings generally attract 5% GST .
Readymade garments and other stitched cloth items earlier followed a two slab structure tied to the value of the piece. Lower value garments attracted 5% GST while higher value garments attracted 12%. With the move to a simpler GST structure, many garments that were earlier in the 12% slab have shifted to 5%, while only clearly high value or luxury clothing can move to 18% where notified.
This means that most day to day cotton fabrics and common readymade clothes for regular use are now taxed at 5% GST. Only special technical textiles, coated fabrics or premium fashion items may fall into the higher 18% slab when they meet the conditions in the rate notifications.
Cloth manufacturers and large traders set HSN codes for every fabric and garment in their product master. When they raise invoices, the correct cloth or apparel HSN code and the matching GST rate are printed on each line. During GST return filing, they use HSN wise summaries to show how much turnover happened in fabric headings such as 5208 or 5209 and how much happened in apparel chapters such as sixty one and sixty two.
Using the correct HSN code for cloth also helps buyers claim input tax credit smoothly. When the code and rate on the supplier invoice match the rate entry for that category, the buyer can show that the purchase was properly classified if any query is raised later.
Conclusion
The cloth HSN code system separates fabric and readymade garments into clear groups for GST. Cotton cloth in fabric form is mainly classified in chapter fifty two under headings like 5208, 5209 and 5210, while stitched garments are placed in apparel chapters sixty one and sixty two with their own headings for shirts, trousers and other clothing.
When cloth businesses map each item to the correct HSN code and apply the proper GST slab, usually 5% for regular cotton fabrics and most everyday readymade clothes and 18% only for special or luxury items, their invoices stay accurate and input tax credit moves smoothly through the supply chain. This reduces the risk of GST notices, interest and penalties linked to wrong classification or wrong GST rates on cloth products.
I am a chartered accountant with over 14 years of experience. I understand income tax, GST, and balancing financial records. I analyze financial statements and tax codes effectively. However, I also have a passion for writing, which is different from working with numbers. Recently, I started writing articles and blog posts. My goal is to make finance easier for everyday people to understand.
Frequently Asked Questions
-
What is the HSN code for cloth in India?
There is no single HSN code for all cloth. Cotton fabrics usually fall in chapter fifty two under headings like 5208, 5209 and 5210, while readymade garments are classified as apparel in chapters sixty one and sixty two.
-
How is GST applied to cotton and readymade cloth?
Basic cotton fabrics under headings such as 5208 and 5209 are generally taxed at 5% GST. Most common readymade clothes for regular use also attract 5% GST, while only special technical or high value items can fall in the higher 18% slab when notified.
-
What is the HSN code for cotton cloth?
Cotton cloth in fabric form is mainly grouped under chapter fifty two. Woven cotton fabrics for shirting, suiting and dress material are commonly classified under headings 5208, 5209 and 5210 depending on weight and construction.
-
How do cloth manufacturers use the HSN code for tax filing?
Cloth manufacturers assign HSN codes from chapter fifty two for fabrics and from chapters sixty one and sixty two for garments in their item masters. They print these codes on invoices and then report fabric and garment turnover HSN wise in their GST returns so that tax is linked to the correct headings and rates.
-
What is the GST rate for readymade cloth under HSN code?
Most regular readymade cloth such as shirts, trousers and daily wear garments is taxed at 5% GST under the relevant apparel headings in chapters sixty one and sixty two. Premium or specialised garments can attract 18% GST where the rate notifications place them in the higher slab.