Apparel and textile GST is product- and HSN-specific. The September 2025 reforms reduced man-made fibre and yarn rates to address inversion and moved many labour-intensive goods to 5%, but businesses must verify the exact post-reform entry for fibres, fabrics, garments and accessories.
Start with the law effective on the transaction date
This article was checked against official GST material available on 2026-07-29. Rates, exemptions, thresholds and portal steps can change. Match the exact supply, HSN/SAC, parties, state, place of supply and effective date to the implementing notification.
Do not file from a secondary headline alone. Keep the notification, classification working, invoices and reconciliations supporting the treatment.
Build an HSN product master
Classify by fibre composition, woven/knitted construction, processing, garment type, sale unit and packaging. Chapter 61 generally covers knitted apparel and Chapter 62 non-knitted apparel.
2025 rate rationalisation
The 56th Council recommended 5% for man-made fibre and yarn and reductions for several labour-intensive goods. Apply the notified entry effective 22 September 2025, not the old ₹1,000 threshold matrix without checking amendments.
Fibres, yarn and fabric
Raw natural fibres, processed fibres, yarn and fabric are distinct tariff stages. Blends follow tariff classification rules; marketing terms such as handloom, sustainable or premium do not determine the rate.
Garments and accessories
Finished apparel, worn clothing, made-ups, zippers, buttons, labels and packaging can carry different HSN codes. Invoice kits and sets only after reviewing set and composite-supply rules.
Input tax credit and inversion
Manufacturers may claim eligible ITC, but rate changes can affect refund calculations and stock pricing. Reconcile suppliers, job workers, dyeing/printing services, imports, exports and credit notes.
Compliance checklist
Maintain composition specifications, HSN/rate master with effective dates, job-work challans, e-way bills, e-invoices where applicable, export LUT/shipping evidence and product-wise return reconciliation.
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Request GST supportFrequently asked questions
Are all garments 5%?
Do not assume so; check the post-reform HSN entry and effective notification.
What changed for man-made textiles?
The Council recommended 5% on man-made fibre and yarn to correct inversion.
Are zippers taxed like garments?
Not necessarily; accessories can classify separately.
Is raw cotton automatically taxable?
Check the exact current entry and transaction.
Can exporters claim refunds?
Zero-rated supplies can support refund routes subject to conditions.
Do handloom labels decide GST?
No. Tariff description and notification control.
