GST on Fashion & Apparel — Rates for Garments, Fabrics & Footwear
The fashion and apparel industry — fabrics, garments, footwear and accessories — has GST rates that often depend on the price/value of the item, which makes classification important for manufacturers, wholesalers and retailers. This guide explains how GST applies to fashion and apparel. (Rates are periodically revised — confirm the current position for your product’s HSN.)
GST on garments & apparel
Readymade garments and apparel have historically been taxed on a value-based structure — a lower rate for items up to a specified price per piece and a higher rate above that threshold. This price-linked approach means the same type of garment can attract different rates depending on its sale value, so retailers must map each SKU to the correct rate.
Fabrics, footwear & accessories
- Fabrics — generally taxed at a lower rate.
- Footwear — also historically value-linked, with a lower rate up to a price threshold and a higher rate above it.
- Accessories & branded goods — rates vary by classification; branded/luxury items may sit at a higher slab.
Inverted duty structure
The textile chain has sometimes faced an inverted duty structure — inputs taxed at a higher rate than the finished product — which can lead to accumulated input tax credit. Where applicable, businesses may claim a refund of accumulated ITC under the inverted-duty provisions, subject to conditions.
Compliance essentials
- Map each product to the correct HSN and rate, including value-based thresholds.
- Track ITC and evaluate inverted-duty refund eligibility.
- E-invoicing/e-way bills where applicable by turnover and movement.
Frequently asked questions
Is GST on apparel based on price?
Yes — readymade garments (and footwear) have historically used a value-based structure, with a lower rate up to a price threshold and a higher rate above it. Confirm the current thresholds.
What rate applies to fabrics?
Fabrics are generally taxed at a lower rate; confirm the current rate for your specific fabric HSN.
Can textile businesses get an ITC refund?
Where an inverted duty structure applies, a refund of accumulated input tax credit may be available, subject to conditions.
In fashion, textiles or footwear? TAXAJ handles GST classification, inverted-duty refunds and returns. Get GST support from TAXAJ →
Related guides: GST registration · Input tax credit · GST returns
