GST Rate on Readymade Garments: Old vs New Structure
Before 22 September 2025, readymade garments followed a ₹1,000 per-piece threshold, with 5% GST below that value and 12% above it. Under the GST 2.0 rate rationalisation, the threshold was raised to ₹2,500 and the higher slab moved from 12% to 18%.
| Sale Value Per Piece | Old Rate (Before 22 Sep 2025) | New Rate (From 22 Sep 2025) |
|---|---|---|
| Up to ₹1,000 | 5% | 5% |
| ₹1,000 – ₹2,500 | 12% | 5% |
| Above ₹2,500 | 12% | 18% |
The threshold applies to the sale value, not the MRP, and is assessed per piece, not per set or per outfit. A garment billed at ₹2,400 after a discount attracts 5% GST even if its printed MRP was ₹3,000.
HSN Codes for Readymade Garments
Readymade garments are classified under two HSN chapters depending on how the fabric is constructed, and both chapters follow the same 5%/18% rate split based on the ₹2,500 threshold.
Chapter 61 — Knitted or Crocheted
Covers T-shirts, vests, sweaters, tracksuits, and other knitted apparel, including common codes like 6109 for T-shirts and singlets.
Chapter 62 — Not Knitted or Crocheted
Covers woven garments such as shirts, trousers, dresses, and saree blouses, including codes like 6105 and 6205 for men's shirts.
Use our HSN code finder to look up the exact code for your specific garment category before invoicing.
Why the GST Rate on Garments Changed
The textile sector had long dealt with an inverted duty structure, where inputs like man-made fibre and yarn were taxed higher than some finished garments, leaving manufacturers with accumulated Input Tax Credit that was difficult or slow to recover. The GST 2.0 rationalisation moved most textile inputs, including yarn and man-made fibre, down to 5%, while raising the top slab on garments from 12% to 18% for higher-value pieces. Together, these changes were aimed at correcting that inversion and simplifying the rate structure from four main slabs down to essentially two.
Who Needs GST Registration to Sell Readymade Garments?
Turnover Above ₹40 Lakh
Garment traders and manufacturers crossing ₹40 lakh annual turnover (₹20 lakh in special category states) must register under GST.
Online Sellers, No Threshold
Selling garments through Amazon, Flipkart, Meesho, or your own website requires GST registration regardless of turnover.
Inter-State Suppliers
Wholesalers and manufacturers dispatching garments to buyers in other states must register irrespective of turnover.
Garment Exporters
Exporting garments is treated as zero-rated supply under LUT, but registration is still required to claim that benefit.
How to Apply the Correct GST Rate on Garment Sales: Step by Step
Confirm the Sale Value of Each Piece
Check the actual transaction value being billed to the customer for that piece, not the printed MRP.
Apply the ₹2,500 Threshold
Charge 5% GST if the sale value is ₹2,500 or below, and 18% if it exceeds ₹2,500, applied separately to each line item.
Use the Correct HSN Code
Classify the garment under the correct Chapter 61 or Chapter 62 code based on whether it's knitted or woven.
Register for GST if Not Already Registered
If your turnover crosses the applicable threshold, or you sell online, Apply for GST Registration before continuing to invoice.
Issue a Correct Tax Invoice
Ensure every invoice shows the HSN code, sale value, and the applicable GST rate split correctly per piece.
File Returns with Accurate Rate-Wise Summaries
Report sales at both the 5% and 18% slabs separately in your GSTR-1 and GSTR-3B filings each period.