A complete guide on GST rate for Apparel, Clothing and Textile Products

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A complete guide on GST rate for Apparel, Clothing and Textile Products

The textile industry is one of the oldest and largest industries in India. It is also one of the most important sectors from the point of view of employment and exports. The sector employs nearly 45 million people, directly or indirectly. Textile products account for nearly 17% of India’s exports, making it one of its most important export sectors.

The Goods and Services Tax (GST) is a comprehensive indirect tax on India's manufacture, sale, and consumption of goods and services. It subsumes a large number of central and state taxes, including excise duty, value-added tax (VAT), service tax, central sales tax (CST), octroi and entry tax. The GST is levied on the supply of goods and services at the national level.
Recently, there have been discussions about the GST rates in the textile sector and we will see what it is and how it has impacted the sector.

GST for Apparel, Clothing and Textile Products

Before 2022, the tax rate on textiles was 5%. As a result of this, the tax rate on raw materials was greater than the completed goods. This denied the people in the textile sector the opportunity to claim Input Tax Credit (ITC).

To remedy this, the government planned to increase the tax rates to 12% effective from January 2022 to solve the issue of inverted tax duty structures that affect the textile value chain.

However, this has been deferred by the government because of the objections received from various states and the industry itself. They have stated that the increase in compliance costs will particularly affect the unorganised sector and MSMEs, as well as raise the cost of poor man's clothing.

So, no changes have been made to the GST rates of textiles yet, and it stands at the rates given in the table below. 

Current GST Rates (as of May 2022)

Source: https://cbic-gst.gov.in/gst-goods-services-rates.html

Chapter / Heading /

Sub-heading / Tariff item

Description of Goods

CGST Rate (%)

SGST / UTGST Rate (%)

IGST Rate (%)

5004 to 5006

Silk yarn

2.5%

2.5%

5%

5106 to 5110

Yarn of wool or of animal hair

2.5%

2.5%

5%

52

Khadi yarn

0

0

0

5205 to 5207

Cotton yarn [other than khadi yarn]

2.5%

2.5%

5%

5301

All goods i.e. flax, raw or processed but not spun; flax tow and waste (including yarn waste and garnetted stock)

2.5%

2.5%

5%

5302

True hemp (Cannabis sativa L), raw or processed but not spun; tow  and  waste  of true  hemp  (including  yarn waste and garnetted stock)

2.5%

2.5%

5%

5303

All goods i.e. textile bast fibres [other than jute fibres, raw or processed but not spun]; tow and waste of these fibres(including yarn waste and garnetted stock)

2.5%

2.5%

5%

5305 to 5308

All goods other than coconut coir fibre] including yarn of flax,  jute, other textile  bast  fibres,  other  vegetable textile fibres; paper yarn, [including coir pith compost put up inunit container and bearing a brand name

2.5%

2.5%

5%

5309 to 5311

Woven fabrics of other vegetable textile fibres, paper yarn

2.5%

2.5%

5%

5609 00 20,5609 00 90

Toran,  Doorway  Decoration  made  from  cotton yarn or woollen yarn and aabhala (mirror) with or without hanging flaps

2.5%

2.5%

5%

5402, 5403, 5404, 5405, 5406

Synthetic or artificial filament yarns

6%

6%

12%

5509, 5510, 5511

Yarn of man made staple fibres

6%

6%

12%

5604

Rubber   thread and  cord,  textile   covered; textile yarn, and strip and the like of heading 5404 or 5405, impregnated, coated, covered or sheathed with rubber or plastics

6%

6%

12%

5605

Metallised   yarn,   whether or   not   gimped, being textile  yarn,  or  strip  or  the  like of heading 5404 or 5405, combined with metal in  the  form  of  thread,  strip  or  powder  or covered with metal; 

6%

6%

12%

5606

Gimped   yarn,   and   strip   and   the   like   of heading  5404  or  5405,  gimped  (other  than those of heading 5605 and gimped horsehair yarn); chenille yarn (including flock chenille yarn); loop wale-yarn

6%

6%

12%

5609

Articles of yarn, strip or the like of heading 5404   or   5405,   twine,   cordage,   rope   or cables,  not  elsewhere  specified  or  included other than products of coir

6%

6%

12%

5809

Woven  fabrics  of  metal  thread  and  woven fabrics of metallised yarn of heading  5605, of a kind used in  apparel, as furnishing fabrics or for similar purposes, not elsewhere   specified or included; such as Zari borders [other than Embroidery or zari articles, that is to say,- imi, zari,  kasab, saima, dabka, chumki, gota  sitara,  naqsi, kora, glass beads, badla, glzal

6%

6%

12%

5402, 5404, 5406

All  goods  other  than  synthetic  filament yarns

9%

9%

18%

5403, 5405, 5406

All  goods  other  than  artificial  filament yarns

9%

9%

18%

62

Articles of apparel and clothing accessories, not knitted or crocheted, of sale value not exceeding Rs. 1000 per piece

2.5%

2.5%

5%

6117, 6214

Handmade/hand embroidered   shawls of sale value not exceeding Rs. 1000 per piece

2.5 %

2.5 %

5%

62

Articles of apparel and clothing accessories, not knitted or   crocheted,   of sale value exceeding Rs. 1000 per piece

6%

6%

12%

6117, 6214

Handmade/hand embroidered   shawls of sale value exceeding Rs. 1000 per piece

6%

6%

12%

64

Footwear   of sale value, not exceeding Rs.1000 per pair

6%

6%

12%

6401

Waterproof footwear  with outer  soles and uppers of rubber or of plastics, the uppers of which are  neither fixed to the sole nor assembled by stitching,  riveting,  nailing, screwing, plugging or similar processes

9%

9%

18%

6402

Other footwear with outer soles and uppers of rubber or plastics

9%

9%

18%

6403

Footwear   with outer soles of   rubber, plastics, leather or composition leather and uppers of leather

9%

9%

18%

6404

Footwear   with outer soles of   rubber, plastics, leather or composition leather and uppers of textile materials

9%

9%

18%

6405

Other footwear

9%

9%

18%

If you are looking to do GST registration or need help with GST return filings, contact us and we will help you get it done without hassles.
 

 


Author : Nivetha

Date     : 02-Jul-2022


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