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Key Takeaways
Goods and Services Tax (GST) is a unified indirect tax applied to goods and services, including clothing. GST On Clothes has a direct influence on how much we finally pay for garments at shops or online stores.
Suppose Hemant bought a kurta costing ₹950, at 5% GST on clothes below ₹2,500, he has to pay ₹47.5 (5% of ₹950) in addition to the cost. This makes his total ₹997.5 (₹950 + ₹47.5). This shows how GST on clothes changes your shopping bill.
In this blog, we will explore the current rate of GST on clothes, why GST matters, the impact on the textile industry, and tips to save GST on clothes.
In the 56th GST Council Meeting, the Council changed the GST rates on various goods and services, including clothes. GST on clothes are chargeable at different rates. The following table lists the current rate of GST on clothes:
The table shows that new rates of GST on clothes bring relief to the textile industry, especially for mid-range garments and raw materials; however, higher-end apparel above ₹2,500 now attracts more tax, which may influence buying patterns in the premium segment.
Read More - GST on Fabrics – Rates, HSN Codes & Textile Sector Impact
Why Does GST On Clothes Matter?
GST rates on clothes are not just numbers; they affect how we shop, how shops price their goods, and how the industry functions. The following table shows that GST on clothes has a direct effect on:
From the above-mentioned table, you can see that GST on clothes directly shapes consumer choices and market demand.
Bonus Tip: Do you know that GST has subsumed 17 different taxes and 13 cesses into one unified tax, eliminating cascading of taxes.
The textile and apparel sector is highly sensitive to price changes. Even a small increase due to GST can influence buying behaviour. The following table shows this change:
The table mentioned above makes it clear that GST on clothes has a mixed impact, supporting growth in budget and mid-range clothing while creating hurdles for premium apparel.
Also Read - Clothing Business Ideas: Trendy and Profitable Ventures for 2025
Consumer Tips To Save On Clothing Purchases Under GST
If you are aware of the rate of GST on clothes, then you can plan your shopping budget accordingly. The following tips might help you save on clothing purchases under GST:
If you follow the above-mentioned tips carefully, then there are chances that you will be able to save your money on purchasing clothes under GST.
Bonus Tip: Do you know that from 2017 to 2025, the GST taxpayer base has increased from 66,50,000 to 1,51,00,000.
GST on clothes has simplified taxation but also created visible price differences across categories. Clothes up to ₹2,500 remain more affordable under the 5% slab, while garments above this limit attract 18% GST, which makes them costlier.
For consumers, if they know the rates of GST on clothes, then it helps them plan shopping budgets better. For retailers and textile producers, the challenge is to balance affordability with profit margins.
Overall, GST has brought uniformity and transparency, but being aware of its slabs makes all the difference in how both buyers and sellers approach clothing purchases.
1. What is the new GST rate on handicrafts and handlooms?
The new GST rate on handicrafts and handlooms is 5%.
2. What is the HSN code for articles of apparel and clothing accessories for sale valued above ₹2,500 per piece?
The HSN code for articles of apparel and clothing accessories for sale valued above ₹2,500 per piece is 62.
3. What is the new GST rate on sewing machines?
The new GST rate on sewing machines is 5%, applicable to domestic and industrial machines covered under HS 8452.
4. What is the HSN code for handicrafts and handlooms?
The HSN code for handicrafts and handlooms is 5705.
5. What is the HSN code for hand embroidered shawls?
The HSN code for hand embroidered shawls is 6117 and 6214.
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