TextilesHSN 50–63

GST on Textiles & Garments — Rates, Job Work & Export Benefits

Complete guide to GST on textiles, garments, yarn, and fibres. Covers the January 2022 rate rationalization (uniform 12% on garments), cotton at 5%, MMF chain at 12%, job work, exports, and inverted duty refund provisions.

12%

Garments (all value)

5%

Cotton (raw)

12%

Man-Made Fibre

12%

Yarn (MMF)

5%

Job Work (Textiles)

12%

Job Work (Garments)

Zero-Rated

Exports

50–63

HSN Chapter

GST Provisions for Textiles

Uniform 12% on Garments (Jan 2022)

From January 1, 2022, ALL garments attract 12% GST regardless of value. The earlier slab (5% for garments ≤₹1,000 and 12% for >₹1,000) was removed to eliminate inverted duty structure. This was recommended by the 45th GST Council to fix ITC accumulation issues in the textile value chain.

Cotton & Natural Fibres — 5%

Raw cotton, jute, silk, wool, and other natural fibres attract 5% GST. Cotton yarn and natural fibre yarn also at 5%. This lower rate supports India's cotton-growing farmers and traditional handloom sector. Khadi and handloom products get additional concessions.

Man-Made Fibre (MMF) — 12%

Man-made fibres (polyester, nylon, acrylic), MMF yarn, and MMF fabrics all attract 12% GST. This was rationalized from the earlier inverted structure (18% fibre → 12% yarn → 5% fabric) which caused massive ITC accumulation. Uniform 12% across the MMF chain since Jan 2022.

Job Work in Textiles

Job work on textiles (dyeing, printing, embroidery, bleaching): 5% for textile processing and 12% for garment manufacturing. The principal manufacturer sends goods to job workers under a challan. Goods must be returned within 1 year (3 years for moulds/dies) or it's deemed a supply.

Inverted Duty Refund

Before Jan 2022, textiles had severe inverted duty (higher tax on inputs than outputs). Accumulated ITC could be claimed as refund under Section 54(3). Post-Jan 2022 rationalization, inverted duty issues are largely resolved for MMF but may persist for cotton garments (5% input vs 12% output creates surplus ITC for cotton).

Exports — Zero-Rated

All textile and garment exports are zero-rated under GST. Exporters can either export under LUT (Letter of Undertaking) without paying IGST and claim ITC refund, or pay IGST on exports and claim refund. Most large exporters use LUT route. Deemed exports to SEZ also zero-rated.

GST Rate Matrix — Textiles & Garments

ItemHSNRateNotes
Raw cotton, jute, silk, wool5201-53055%Natural fibres
Cotton yarn5205-52075%All counts
Cotton fabrics5208-52125%Woven cotton
Man-made fibres (polyester, nylon)5402-540612%From Jan 2022
MMF yarn5509-551112%From Jan 2022
MMF fabrics5512-551612%From Jan 2022
Ready-made garments (all)6101-611712%Uniform from Jan 2022
Knitted/crocheted fabrics6001-600612%All types
Carpets & floor coverings5701-570512%Handmade & machine
Blankets, bed linen, curtains6301-630412%Made-up articles
Technical textiles591112%Industrial use
Job work — textile processing99885%Dyeing, printing, bleaching

Frequently Asked Questions

What is the current GST rate on ready-made garments?
From January 1, 2022, ALL ready-made garments attract a uniform 12% GST regardless of sale value. The earlier distinction (5% for garments ≤₹1,000 and 12% for >₹1,000) has been removed. This applies to shirts, trousers, sarees, kurtas, and all types of apparel.
Why was the textile GST rate changed in January 2022?
The change addressed the inverted duty structure. Earlier, man-made fibre attracted 18%, yarn 12%, fabric 5%, and garments 5%. This caused massive ITC accumulation at each stage with no outlet. The 45th Council recommended uniform 12% across the MMF value chain to fix this structural issue.
Is GST applicable on handloom and khadi products?
Handloom and khadi products attract 5% GST (same as cotton textiles). However, many handloom products sold through authorized khadi outlets or government emporiums may get additional concessions. Gandhi Ashram/KVIC products remain at the lower 5% slab. No special exemption from GST itself.
How does job work GST apply in the textile industry?
Textile job work (dyeing, bleaching, printing, embroidery) attracts 5% GST. Garment manufacturing job work (stitching, cutting, tailoring) attracts 12%. The principal sends goods under a delivery challan (not invoice). Job worker must return goods within 1 year. If not returned, it's treated as supply and full GST applies.

Textile Business GST — Automated

Laabam.One handles multi-rate textile invoicing, job work challans, export LUT management, and inverted duty refund calculations automatically.

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