HSN Code for Clothes and GST Rate: The Rs 2,500 Rule

Clothes fall under HSN chapter 61 if knitted and chapter 62 if not knitted, while made-up textile articles such as bed linen fall under chapter 63. From 22 September 2025, GST is 5% where the sale value is not more than Rs 2,500 per piece and 18% where it is more.

What exactly did we confirm?

We read the press release on the 56th GST Council meeting, published by PIB on 3 September 2025. Its annexure moves three entries from 12% to 18%: chapter 61 and chapter 62 articles "of sale value exceeding Rs. 2500 per piece", and chapter 63 articles and sets above the same value, other than worn clothing and rags. It also lists the same three chapters at "not exceeding Rs. 2500 per piece" under the heading of a change in value with no change in the 5% rate. The release gives 22 September 2025 as the date for the new rates on goods.

We then read the rate notification of 17 September 2025 in a compiled copy on a CBIC site. The 5% schedule has entries for chapters 61, 62 and 63 up to Rs 2,500 per piece, and the 18% schedule has the matching entries above Rs 2,500. The press release on the 57th Council meeting of 8 October 2026 lists no change for garments.

Which heading for which garment?

The descriptions below are from the HSN directory on the GST portal. The first question is always the same: is the fabric knitted, or woven?

Ethnic wear does not have one fixed heading. A woven kurta for men and a woven kurta for women sit in different headings of chapter 62, and a knitted one moves to chapter 61. Match the garment to the directory line by line. The method is in how to find the HSN code for a product.

What about fabric, sarees, leather jackets and shoes?

These are not chapter 61 to 63 goods, so the Rs 2,500 rule for garments does not decide their rate.

• Woven fabrics of silk, wool, cotton and man-made fibres, and knitted fabrics of chapter 60, are in the 5% schedule of the notification we read, with no value limit.
• An unstitched saree is usually classified as fabric and not as apparel. Check the heading for your fabric before you rely on this.
• Leather garments fall under heading 4203, which is in the 18% schedule.
• Footwear has its own limit: 5% up to Rs 2,500 per pair.

A worked example

You sell two woven cotton shirts for men, both under heading 6205.

Shirt A is priced at Rs 1,200 before GST. The sale value is below Rs 2,500, so GST is 5%, which is Rs 60. The buyer pays Rs 1,260.

Shirt B is priced at Rs 2,800 before GST. The sale value is above Rs 2,500, so GST is 18%, which is Rs 504. The buyer pays Rs 3,304.

Now a sale. You put Shirt B on a festival discount at Rs 2,400 before GST and show the discount on the invoice. The value of that piece is now within the limit, so the 5% rate applies and the GST is Rs 120. The same shirt, the same HSN, two rates in the same month. In Table 12 of GSTR-1, heading 6205 will then have two rows, one at 5% and one at 18%.

The mistake sellers usually make

The first mistake is one rate per product in the listing. On marketplaces the price moves with every deal, coupon and price match, and the rate has to move with it when a piece crosses Rs 2,500. Check a few invoices from each sale period.

The second is prices that include GST. Is the Rs 2,500 tested on the price with tax or without it? The notification says "sale value" and does not define it in the entry. Most practitioners test the taxable value per piece, before GST. Around the limit the answer changes your tax, so settle it with a tax expert before fixing a price between Rs 2,500 and Rs 2,950.

The third is sets. The limit is per piece. Whether a kurta set sold at one price is one piece or several is a point on which you should take advice, and then apply the answer the same way on every invoice.

The last is the old rate. Listings set up before 22 September 2025 may still carry 12%. That slab no longer exists for garments.

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