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:

Particulars	GST Rate (old)	GST Rate (new)
Readymade Garments and Made-ups	5% (below ₹1,000 per piece)	5% (below ₹2,500 per piece)
Man-Made Fibres	18%	5%
Man-Made Yarns	12%	5%
Articles of apparel and clothing accessories for sale valued above ₹2,500 per piece.	12%	18%

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:

Particular	Details	Example
Consumer spending	Higher tax increases the bill, leading some buyers to choose lower-priced options.	A shirt priced at ₹2,490 attracts 5% GST (₹124.5, final price ₹2,614.5), but at ₹2,510 it attracts 18% (₹451.8, final price ₹2,961.8).
Retailers and brands	Premium brands like Zara, Levi’s, and Lacoste, may see slower demand due to higher GST slabs.	A branded jacket costing ₹3,000 incurs 18% GST = ₹540, final price ₹3,540, making buyers think twice before purchase.
Small businesses	Local shops often benefit from lower-rate categories, as more buyers prefer affordable clothes.	A kurta priced at ₹950 has 5% GST = ₹47.5, final price ₹997.5, keeping it attractive for price-sensitive customers.

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:

Particular	Details
Budget clothing	The 5% slab helps sustain demand in the mass market.
Mid-range apparel	This category benefits as buyers still find clothes affordable.
Premium clothing	The 18% slab on clothes above ₹2,500 often discourages purchases, especially during non-festive seasons.
Textile industry response	Industry bodies welcomed rate revisions for mid-range products but expressed concern for high-end categories.

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:

Tip	Detail
Check the base price carefully	Try to keep purchases under ₹2,500 if you want to stay in the 5% slab.
Compare before buying	Always calculate the total price after GST, not just the base price.
Use discounts wisely	Festive and clearance sales can offset the GST impact.
Look for brands absorbing GST	Some sellers run promotions where they bear part of the GST cost.

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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