Tax rate &HSN

The GST rates and HSN classifications for garments in India depend on both the nature of the item (stitched vs. unstitched) and its retail sale price. Following the latest revisions (often referred to in the context of recent updates like "GST 2.0"), the tax structure is primarily determined by a price threshold.

GST Rates and Thresholds

As of the most recent updates, the tax structure is generally categorized as follows:

• Garments priced up to ₹2,500 per piece: Attract a 5% GST rate.

• Garments priced above ₹2,500 per piece: Attract an 18% GST rate.

HSN Code Classification

Textile products and garments are categorized under specific HSN chapters:

• Chapter 50–60: Covers fabrics and materials (including cotton, silk, wool, and man-made fibers), which generally attract a 5% GST rate. This is where "unstitched" materials (such as fabrics by the meter or fabric rolls) typically fall.

• Chapter 61: Covers knitted or crocheted apparel and clothing accessories (e.g., T-shirts, sweaters).

• Chapter 62: Covers non-knitted or non-crocheted apparel (e.g., shirts, trousers, dresses, ethnic wear like suits/kurta sets).

• Chapter 63: Covers other made-up textile articles (e.g., bed linen, curtains, blankets).

Key Distinctions

• Stitched vs. Unstitched: "Unstitched" fabric (sold by length/meter) is generally treated as a textile fabric under Chapters 50–58 and is usually taxed at 5%. "Stitched" or ready-made garments fall under Chapters 61 or 62 and are subject to the price-based thresholds mentioned above.

• Tailoring Services: Services provided by tailors (stitching clothes for customers) are typically classified under HSN code 9988 and are subject to a 5% GST rate.

Summary:

For stitched garments, the GST is 5% if the price is ₹2,500 or less per piece, and 18% if it exceeds ₹2,500. Unstitched fabrics are generally taxed at a standard 5% rate. HSN codes for these items are generally found in Chapters 50–60 (for fabrics/unstitched material) and Chapters 61–62 (for finished/stitched garments).