HSN Codes and GST Rates for Clothing and Garment Shops: Readymade Apparel, Fabric, Footwear and the Price-Based Rate Split

Clothing is the largest small-retail category in India, and it is also one of the trickiest to bill correctly. Two things trip up garment shops that never bother a grocery or a hardware store: the same-looking garment sits in a different HSN chapter depending on whether it is knitted or woven, and the GST rate on that garment changes with its selling price. Get either wrong and your GSTR-1 HSN summary stops matching your sales register.

Here is the full picture for a clothing, fabric and footwear shop, in the order you actually need it at the counter.

The two chapters every garment shop lives in

Readymade apparel splits across two HSN chapters, and the dividing line is construction, not style:

• Chapter 61 covers garments that are knitted or crocheted: T-shirts, polos, jersey kurtis, sweatshirts, leggings, hosiery, most innerwear.
• Chapter 62 covers garments that are woven: formal shirts, trousers, jeans, suits, woven kurtas, stitched ethnic wear.

So the HSN code for readymade garments is never one single number. A men's knitted T-shirt is 6109 and a men's woven formal shirt is 6205, even though both are "shirts" to the customer. Check the fabric first, then pick the chapter.

The price-based rate split

Apparel and footwear are rated by value per piece, not by category. As things stand after the September 2025 rate rationalisation, the split looks like this:

Four details decide whether you apply this correctly:

1. The threshold is per piece, not per bill. Six shirts at Rs. 900 each on one invoice are six pieces at 5%, not one Rs. 5,400 line at 18%.
2. It follows transaction value, not MRP. A jacket tagged Rs. 2,800 and sold at Rs. 2,400 after an invoice discount is taxed at 5%.
3. Transaction value means the pre-GST value. Do not add tax first and then test against the threshold.
4. A set sold as one unit is one piece. A salwar suit set or a two-piece co-ord billed as a single item is tested on the set's value.

If you also run stitching or alterations, tailoring and garment job work fall under SAC 9988 and are billed as a service, separate from the garment line. Confirm the exact sub-code with your CA if you do job work for other registered businesses.

Fabric, footwear and the rest of the shop

Fabric sold by the metre is classified by fibre, not by end use:

• Woven cotton fabric: 5208, 5209, 5210
• Woven silk fabric: 5007
• Woven wool or fine animal hair: 5111, 5112
• Woven synthetic filament fabric, including most polyester saree material: 5407, 5408
• Woven synthetic staple fibre fabric: 5512, 5513, 5515
• Knitted or crocheted fabric: 6004, 6005, 6006

An unstitched saree or a dress material cut is fabric. The same saree, once stitched into a garment, moves to Chapter 62.

Footwear sits in Chapter 64, coded by the upper and the outer sole:

• 6401 waterproof footwear
• 6402 footwear with rubber or plastic uppers, including most slippers
• 6403 footwear with leather uppers
• 6404 footwear with textile uppers, including canvas and most sports shoes
• 6405 other footwear
• 6406 parts: soles, insoles, laces

Common side-lines worth pre-coding in your item master: bed and table linen and towels 6302, curtains 6303, blankets 6301, other made-ups such as masks and dusters 6307, bags and wallets 4202, caps 6505, buttons 9606, zips 9607, sewing thread 5204 or 5401, elastic and narrow fabric 5806.

Making this work in your billing software

The point of all this is that nobody should be recalling HSN codes while a customer waits. Set it up once:

• Store the HSN code and GST rate on the item, not on the bill, so the counter never chooses.
• Create separate items for the same style across price bands if your software picks rate from the item, so a Rs. 1,999 kurta and a Rs. 3,499 kurta cannot collide.
• Reprice with care: moving an item across Rs. 2,500 changes its tax rate, so review the rate whenever you change a price or run a sale.
• Keep the fabric and the stitched-garment versions of the same design as distinct items.
• Check that your invoice prints HSN at the digit length your turnover requires, and that a single bill can carry both 5% and 18% lines with a correct rate-wise tax summary.

Rates and thresholds do change, and the apparel threshold has already moved once (it was Rs. 1,000 for years). Before a big repricing or your next annual return, verify the current rate for your main chapters on the CBIC rate finder rather than trusting a tag printed last season.

Frequently Asked Questions

What is the HSN code for readymade garments?

There is no single code. Knitted garments fall under Chapter 61 and woven garments under Chapter 62, then the four-digit heading depends on the garment: 6109 for knitted T-shirts, 6205 for woven men's shirts, 6204 for women's woven dresses and trousers, 6203 for men's suits and trousers. Identify knitted versus woven first, then the garment type.

Which value decides whether GST is 5% or 18%, the MRP or the selling price?

The transaction value, meaning the pre-GST price you actually charge for that piece. If a discount shown on the invoice brings a garment below the threshold, the lower rate applies even though the tag says more.

Is fabric taxed the same as a stitched garment?

No. Fabric by the metre stays at 5% regardless of value, while a stitched garment follows the price-based split. This is why an unstitched saree and a stitched one can carry different rates on the same bill.

Can one invoice contain both 5% and 18% garments?

Yes, and it will happen often in a clothing shop. Each line carries its own HSN code and rate, and the invoice needs a rate-wise tax summary. Any billing software you use should total CGST and SGST separately per rate slab.

How many digits of HSN do I need to print?

It depends on your aggregate turnover, not on the product. Smaller registered businesses print four digits and larger ones six, with eight digits required for exports. Whatever applies to you, store the full code in your item master so you can lengthen what you print without re-tagging your stock.