HSN Code for Readymade Garments & Fabrics – Complete Guide to GST Rate 2025
Are you a boutique owner or online apparel seller struggling to find the correct HSN code for your products? Incorrect invoicing can lead to GST penalties and disrupt your business. Understanding the Harmonized System of Nomenclature (HSN) is non-negotiable for GST compliance in the bustling textile sector. This comprehensive guide will demystify the HSN code for readymade garments and fabrics, helping you navigate the latest GST rates for 2025. This information is crucial for accurately calculating the GST on readymade garments 2025 and ensuring your tax filings are flawless. Whether you run a small manufacturing unit, a retail store, or sell apparel online, this guide will ensure you are compliant and confident in your tax filings.
What is an HSN Code and Why is it Critical for Garment Businesses?
Navigating the world of GST can seem complex, but at its core are systems designed to bring uniformity and clarity to taxation. The HSN code is one such critical system. For any business involved in selling physical goods, from small online stores to large manufacturing units, understanding and correctly implementing HSN codes is the first step towards seamless tax compliance. It acts as a universal language for product classification, ensuring that a cotton shirt is identified similarly across the country and the world, which is vital for calculating the correct tax and filing accurate returns.
A Simple Guide to the HSN System in India
The Harmonized System of Nomenclature, or HSN, is a globally recognized method of classifying goods for customs and tax purposes. It’s a systematic code that categorizes products into different sections, chapters, and headings. In India, the system is extended to an 8-digit format to provide an even more specific classification for GST. This structure helps in precisely identifying a product and applying the correct tax rate without ambiguity.
The 8-digit HSN code can be broken down as follows:
- First 2 digits: Chapter (Broad category of the product)
- Next 2 digits: Heading (Sub-category within the chapter)
- Next 2 digits: Sub-heading (Further detailed classification)
- Final 2 digits: Tariff Item (Highly specific product code)
For example, let’s take a simple men’s cotton shirt. Its HSN classification would look like this:
- Chapter 62: Articles of apparel and clothing accessories, not knitted or crocheted.
- Heading 6205: Men’s or boys’ shirts.
- Sub-heading 620520: Of cotton.
- Tariff Item 62052000: The complete 8-digit code for a man’s cotton shirt.
This detailed breakdown is essential for filing GST returns and generating e-invoices, as it directly links the product to its applicable GST rate.
The Impact of Using the Correct HSN Classification of Garments India
Using the correct HSN classification of garments India is not just a procedural formality; it is a legal requirement with significant financial implications. The entire GST framework relies on this classification to function correctly, and errors can lead to a cascade of problems for a business. Getting it right ensures that you are collecting the right amount of tax from your customers and paying the right amount to the government, maintaining the integrity of your business operations.
Here are the critical risks associated with using an incorrect HSN code:
- Incorrect GST Calculation: The primary risk is applying the wrong GST rate. If you charge a lower rate, you will face a shortfall in tax payment, leading to interest and penalties. If you charge a higher rate, you overcharge your customers, making your products uncompetitive and potentially leading to disputes.
- Departmental Audits and Penalties: Mismatches in HSN codes are a major red flag for tax authorities and can trigger a departmental audit. Under GST law, quoting an incorrect HSN code can attract a penalty of up to ₹25,000 for each incorrect invoice, which can accumulate rapidly.
- Input Tax Credit (ITC) Issues: For B2B transactions, the HSN code you mention on your invoice is used by your buyer to claim Input Tax Credit. If the code is incorrect, your buyer’s ITC claim could be rejected, damaging your business relationships and credibility.
The Complete HSN Code for Readymade Garments List (2025)
In the GST framework, readymade garments are primarily categorized under two main chapters of the HSN system. This classification depends on the manufacturing process of the fabric used. Chapter 61 covers garments that are knitted or crocheted, which are typically stretchable and made from looped yarns, like T-shirts and sweaters. Chapter 62 covers garments made from woven fabrics, which are produced by interlacing two sets of yarn and are generally less stretchable, such as formal shirts, trousers, and suits. Understanding this fundamental distinction is the first step in identifying the correct HSN code for your apparel products.
HSN Codes for Knitted or Crocheted Garments (Chapter 61)
Garments under this chapter are known for their comfort and elasticity. The table below provides a helpful readymade garment HSN code list India for common items falling under Chapter 61. It is essential to match your product description accurately to find the corresponding code and apply the correct GST rate.
| HSN Code (8-digit) | Description of Goods | Applicable GST Rate (%) |
|---|---|---|
| 61034200 | Men’s or boys’ trousers, bib and brace overalls, of cotton | 12% |
| 61046200 | Women’s or girls’ trousers, bib and brace overalls, of cotton | 12% |
| 61091000 | T-shirts, singlets and other vests, of cotton | 12% |
| 61102000 | Sweaters, pullovers, sweatshirts, of cotton | 12% |
| 61121100 | Tracksuits, of cotton | 12% |
| 61159500 | Socks, pantyhose, stockings, of cotton | 12% |
HSN Codes for Woven (Not Knitted) Garments (Chapter 62)
Woven garments constitute a large part of the formal and casual wear market. These include items like formal shirts, suits, dresses, and sarees. Their classification is done under Chapter 62. Below is a list of HSN codes for some of the most commonly sold woven garments.
| HSN Code (8-digit) | Description of Goods | Applicable GST Rate (%) |
|---|---|---|
| 62034200 | Men’s or boys’ trousers and shorts, of cotton | 12% |
| 62044220 | Women’s or girls’ dresses, of cotton | 12% |
| 62046200 | Women’s or girls’ trousers and shorts, of cotton | 12% |
| 62052000 | Men’s or boys’ shirts, of cotton | 12% |
| 62063000 | Women’s or girls’ blouses, shirts, and shirt-blouses, of cotton | 12% |
| 62092000 | Babies’ garments and clothing accessories, of cotton | 12% |
| 62114290 | Women’s or girls’ kurta and salwar with or without dupatta | 12% |
How to Find the Exact HSN Code for Your Product
Finding the precise HSN code from thousands of options can be daunting, but a systematic approach makes it manageable. Follow these steps to accurately classify your apparel product:
- Determine the Primary Fabric: First, identify the main material of your garment. Is it predominantly cotton, silk, polyester, or a blend? The fabric composition is a key determinant.
- Identify the Fabric Construction: Next, determine if the fabric is knitted (stretchable, like a T-shirt) or woven (less flexible, like a formal shirt). This will point you to either Chapter 61 (knitted) or Chapter 62 (woven).
- Identify the End Product: Pinpoint the exact nature of the garment. Is it a shirt, a dress, a pair of trousers, or a suit? Also, consider the intended user (men’s, women’s, or babies’).
- Use the GST Portal Search Tool: With this information, use the official search tool to find the exact 8-digit code. This is the most reliable way to ensure you are using the latest and most accurate code for your invoicing.
For final verification, always use the GST Portal HSN Search tool.
Understanding HSN Codes for Fabrics in India
For businesses that manufacture garments or sell fabrics directly, understanding the HSN classification for textiles is just as important as it is for readymade apparel. Fabrics are the raw materials of the garment industry, and they are classified under a different set of HSN chapters, primarily from Chapter 50 to Chapter 55. The classification is based on the type of fibre—be it natural like silk and cotton, or man-made like polyester and viscose. Correctly classifying fabrics is crucial for managing inventory, calculating taxes accurately, and ensuring a smooth supply chain.
Common Fabric HSN Codes in India (Chapters 50-55)
The textile industry uses a vast array of materials, each with its unique HSN code. The HSN codes for fabrics India are categorized based on their composition. For instance, silk fabrics fall under Chapter 50, cotton under Chapter 52, and man-made filaments like polyester under Chapter 54. Having a quick reference guide for these common fabric HSN codes in India can save significant time and prevent errors in your GST filings. The table below summarizes the key chapters and common codes for different fabric types.
| Fabric Type | HSN Chapter | Common HSN Codes | GST Rate |
|---|---|---|---|
| Silk | Chapter 50 | 5007 | 5% |
| Cotton | Chapter 52 | 5208, 5209, 5210, 5211, 5212 | 5% |
| Man-made filaments (e.g., Polyester, Nylon) | Chapter 54 | 5407, 5408 | 5% |
| Man-made staple fibres (e.g., Viscose) | Chapter 55 | 5512, 5513, 5514, 5515, 5516 | 5% |
GST Rate for Garments India 2025: What You Need to Know
The Goods and Services Tax (GST) regime has brought about significant changes in how textiles and garments are taxed in India. Understanding the applicable GST rates is fundamental for accurate pricing, invoicing, and tax payments. The government has made efforts to simplify the tax structure to reduce complexity for small and medium-sized businesses. Staying informed about the latest rates and rules is crucial for compliance and avoiding unnecessary financial burdens.
Current GST Slabs on Textiles and Readymade Garments
One of the most significant recent changes in the textile industry was the rationalization of GST rates. Previously, a dual-rate system existed where garments and footwear were taxed differently based on their sale price (below or above ₹1,000). This created confusion and compliance challenges.
Important Note: The GST Council has removed this value-based distinction. Now, a uniform GST rate applies to readymade garments regardless of their price. As of the latest updates, the GST rate for most readymade garments and apparel is 12%. For most fabrics, the applicable rate is 5%. This unified structure simplifies calculations and ensures consistency across the market. Always refer to the latest notifications for the current GST rates for textiles India 2025.
CGST, SGST, and IGST Explained for Garment Sellers
The total GST charged on a product is split between the Central Government and the State Government. The type of tax you charge—CGST, SGST, or IGST—depends on whether the sale is within your state (intra-state) or to another state (inter-state).
- Intra-State Sales (Within the same state): For sales made within the same state, the GST is divided equally into Central GST (CGST) and State GST (SGST). For example, if the applicable GST rate is 12%, you will charge 6% CGST and 6% SGST.
- Inter-State Sales (To another state): For sales made to a customer in a different state, the entire GST amount is charged as Integrated GST (IGST). If the rate is 12%, you will charge the full 12% as IGST.
Example Calculation:
Let’s say you sell a shirt for ₹1,500 (exclusive of tax) with a 12% GST rate.
- Sale within your state (e.g., Maharashtra to Maharashtra):
- Base Price: ₹1,500
- CGST @ 6%: ₹90
- SGST @ 6%: ₹90
- Total Invoice Value: ₹1,680
- Sale to another state (e.g., Maharashtra to Karnataka):
- Base Price: ₹1,500
- IGST @ 12%: ₹180
- Total Invoice Value: ₹1,680
The total tax collected is the same, but the way it is levied and reported in your GST returns differs.
Staying Updated on Garments HSN Code Update India
The GST law is dynamic. The GST Council meets periodically and may announce changes to HSN codes, GST rates, or compliance rules. It is crucial for business owners to stay informed about any garments HSN code update India. A change in an HSN code or tax rate can impact your pricing, invoicing software, and accounting systems. Ignorance of a change is not considered a valid excuse by tax authorities.
To stay current, you should:
- Regularly visit the official website of the Central Board of Indirect Taxes and Customs (CBIC) for the latest notifications, circulars, and press releases.
- Bookmark the GST portal for easy access to tools and updates.
- Consider subscribing to a reliable tax news service or consulting with a tax professional who can provide timely updates and guidance.
You can find the most recent official information on the CBIC website.
Conclusion
Correctly identifying and using the HSN code for your products is not just a matter of compliance; it is a cornerstone of efficient and transparent business operations in the GST era. For business owners in the apparel and textile industry, this involves understanding the key distinctions between knitted (Chapter 61) and woven (Chapter 62) garments, as well as the classifications for various fabrics. By ensuring every invoice carries the right HSN code and the corresponding GST rate, you can avoid penalties, build trust with your customers, and ensure a smooth process for claiming input tax credits. In essence, mastering the HSN code for readymade garments is fundamental for GST compliance and seamless business operations in India.
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Frequently Asked Questions (FAQs)
1. What is the HSN code for a 100% cotton T-shirt?
A cotton T-shirt, being a knitted garment, falls under Chapter 61. The most common HSN code is 61091000, which is for ‘T-shirts, singlets and other vests, knitted or crocheted, of cotton’. The applicable GST is typically 12%.
2. Is the GST rate different for garments sold below and above ₹1000 in 2025?
No. The GST Council has rationalized the rates. The value-based distinction (different rates for items below/above ₹1000) is no longer applicable. A uniform GST rate applies regardless of the sale price.
3. Where can I find the most reliable and official readymade garment HSN code list India?
The most reliable source is the HSN search tool on the official GST India Portal. You should always refer to it for the most accurate and updated information.
4. What are the penalties for using the wrong HSN code on an invoice?
Using an incorrect HSN code can lead to a penalty of up to ₹25,000 for an incorrect invoice under GST law. It can also lead to disputes over the applicable tax rate and issues with your customer’s Input Tax Credit (ITC).
5. Is there a different HSN code for children’s clothing?
Yes, specific HSN codes exist for babies’ garments and children’s clothing. For instance, ‘Babies’ garments and clothing accessories’ are classified under HSN codes 6111 (knitted) and 6209 (not knitted). It’s important to use these specific codes rather than general adult apparel codes.
