GST on Clothes – Updated Rates & Complete Guide

Key Takeaways
 

• In the 56th GST Council Meeting, the Council has decided to simplify GST with a two-slab structure (5% and 18%).
   
• Change in GST rates has also impacted GST on clothes; now you need to pay 5% GST on clothes below ₹2,500 and 18% on clothes above ₹2,500.
   
• The change in GST rates aims to support MSMEs, manufacturing, economic momentum, ease of living, and revenue growth. 

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.

Current GST Rate 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.

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.

Impact On The Textile And Apparel Industry

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.

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.

Conclusion

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.

FAQs

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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LoansJagat Team

‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.