After the GST 2.0 reform (effective 22 September 2025), all fabric — cotton, silk, wool, jute and man-made — is taxed at 5%. Man-made fibre and yarn were also cut to 5% (from 18% and 12%), largely fixing the inverted-duty problem. Readymade garments up to ₹2,500 per piece attract 5%; garments above ₹2,500 attract 18%. Textile job work is 5% across the sector.
GST Rate Table for Textile Products
Every common textile product with its HSN chapter and current GST rate under the GST 2.0 two-slab structure. Use our HSN / SAC code finder to confirm a specific product.
| Product | HSN | GST Rate | Notes |
|---|---|---|---|
| Raw cotton | 5201–5203 | 5% | Ginned, unginned, cotton waste |
| Cotton yarn / sewing thread | 5204–5207 | 5% | Single or multiple, carded/combed |
| Cotton fabrics (woven) | 5208–5212 | 5% | Grey, bleached, dyed, printed |
| Silk fabrics / raw silk | 5004–5007 | 5% | Includes silk yarn & noil |
| Wool fabrics / wool yarn | 5106–5113 | 5% | Wool & fine animal hair |
| Jute fabrics | 5307–5310 | 5% | Jute yarn & woven fabric |
| Man-made fibre (staple / filament tow) | 5501–5507 | 18% | MMF raw material still at 18% |
| Man-made filament yarn (polyester/nylon) | 5402–5406 | 5% | Cut from 12% under GST 2.0 |
| Man-made staple yarn (viscose/acrylic) | 5508–5511 | 5% | Cut from 12% under GST 2.0 |
| Man-made fabric (poly/viscose, woven & knit) | 5407–5408 / 5512–5516 | 5% | Cut from 12% — now same as cotton |
| Knitted / crocheted fabric | 6001–6006 | 5% | All fibres, uniform 5% |
| Garments & apparel ≤ ₹2,500/piece | 6101–6117 / 6201–6217 | 5% | Knitted or woven — 5% up to ₹2,500 |
| Garments & apparel > ₹2,500/piece | 6101–6117 / 6201–6217 | 18% | Per-piece transaction value |
| Made-up articles (bed linen, towels) ≤ ₹2,500 | 6301–6308 | 5% | 5% up to ₹2,500/piece |
| Made-up articles > ₹2,500/piece | 6301–6308 | 18% | Same per-piece rule as apparel |
| Khadi / hand-woven fabric | Various | 5% | Sold through KVIC/khadi outlets |
Rates reflect the GST 2.0 two-slab structure effective 22 September 2025 (56th GST Council, notifications of 17 Sep 2025). Confirm on the official GST portal before invoicing.
Fabric & Yarn vs Readymade Garments
Two things decide textile GST now. Fabric, yarn and fibre sit at a flat 5% (only MMF raw material is 18%). For readymade garments and made-up articles, the deciding factor is the sale price per piece — the ₹2,500 threshold.
Fabric, yarn & affordable apparel
- All fabric — cotton, silk, wool, jute, man-made
- Cotton, silk, wool, poly & viscose yarn
- Man-made fibre & yarn (cut from 12–18%)
- Garments & made-ups ≤ ₹2,500 per piece
- Textile job work services
Premium apparel & MMF raw material
- Garments & made-up articles > ₹2,500/piece
- Man-made fibre raw material (pre-yarn)
- Rate is per piece, not per invoice
- Full input-tax credit available
- Technical / industrial textile products
A single invoice with ten shirts at ₹1,500 each is taxed at 5% per shirt — the values are not aggregated. Only when an individual garment's sale value exceeds ₹2,500 does that piece move to 18%. Classify each SKU by its per-piece price.
Not sure which slab your textile products fall in?
Get My GST Rate →GST on Job Work in the Textile Industry
Job work across the entire textile sector attracts a concessional 5% GST under SAC 9988. This covers the decentralised weaving, dyeing and processing units that dominate Indian textiles:
- Weaving — converting yarn to fabric on a job-work basis.
- Dyeing, bleaching & printing of yarn or fabric.
- Embroidery & finishing — calendaring, stentering, compacting.
- Cutting & stitching of garments for a principal.
If the activity does not fall under SAC 9988 textile job work, standard 18% GST may apply. Keep delivery challans and job-work registers under GST return rules.
How GST Adds Up on Apparel
5% Shirt priced at ₹2,000
18% Jacket priced at ₹4,000
Use the GST calculator to work out tax on any textile price and slab.
Running a powerloom, dyeing or job-work unit? Get your GST set up right.
Get Textile GST Advice →Inverted Duty Structure — Mostly Fixed
For years the man-made fibre (MMF) chain suffered an inverted duty structure: fibre at 18% and yarn at 12% feeding fabric at 12% and garments at 5%, leaving manufacturers with unusable accumulated ITC. GST 2.0 cut MMF yarn and fabric to 5%, sharply reducing the mismatch.
| Stage | Old GST | New GST (22 Sep 2025) |
|---|---|---|
| Man-made fibre (raw material) | 18% | 18% |
| Man-made yarn | 12% | 5% |
| Man-made fabric | 12% | 5% |
| Garment ≤ ₹2,500 | 5% | 5% |
Only the fibre-to-yarn step still carries a residual inversion (18% → 5%); refunds under Section 54(3) may still arise there.
Where an inversion remains — mainly fibre bought at 18% converted into 5% yarn — the accumulated ITC can still be refunded under Section 54(3) of the CGST Act. See our guide on GST refund of accumulated ITC.
Composition Scheme & Registration
Textile businesses dealing in goods must register once turnover crosses ₹40 lakh (₹20 lakh in special-category states). Traders up to ₹1.5 crore may opt for the composition scheme at 1%, but cannot collect GST or pass on input tax credit.
Composition suits you if
- You are a small local trader with mostly B2C sales
- You want simple quarterly compliance
- You don't need to pass on ITC to buyers
Avoid composition if
- You export or make inter-state supplies
- Your buyers need ITC on their purchases
- You have an inverted-duty ITC refund to claim
Want us to check whether composition or regular registration is cheaper?
Talk to a GST Expert →Textile GST Compliance Checklist
A practical checklist for textile manufacturers, traders, wholesalers and job-work units after GST 2.0:
- GST registration (GSTIN)
- Correct HSN & rate on every SKU
- Per-piece pricing for the ₹2,500 apparel rule
- Tax invoice / bill of supply
- Job-work delivery challans & register
- GSTR-1 (outward supplies)
- GSTR-3B (monthly/quarterly)
- ITC reconciliation (GSTR-2B)
- Inverted-duty refund (if applicable)
- E-way bill on movements
- GSTR-9 annual return
- Books & stock records
GST 2.0 removed most of the textile inverted-duty pain by bringing MMF yarn and fabric to 5%. But the fibre-to-yarn step (18% → 5%) can still leave refundable credit, and mis-pricing garments around the ₹2,500 line is a common audit flag — classify each SKU by its per-piece sale value.
Frequently Asked Questions
Related TaxClue services
GST for Textile Manufacturers, Traders & Job Workers
From HSN classification and the ₹2,500 apparel rule to inverted-duty refunds and monthly returns, TaxClue's CA-led team handles textile GST end to end — 100% online, across India.