Quick answer: Since 22 September 2025, readymade garments in HSN chapters 61 and 62 carry 5% GST if the sale value is ₹2,500 or less per piece, and 18% if it is above ₹2,500. The old 12% slab is gone. T-shirts use HSN 6109, hoodies and sweatshirts 6110, knitted polos 6105 (men) or 6106 (women), and woven shirts 6205.
GST is one of the first things that confuses new clothing founders: what rate to charge, which HSN code to print on the invoice, and whether you even need to register. This guide covers what most Indian D2C apparel brands need to know in 2026, with worked examples. It is general information, not tax advice, so confirm your exact situation with your CA.
The ₹2,500 rule explained
The GST rate on clothing depends on the sale value of each piece, not on the MRP and not on your total invoice.
| Sale value per piece (before GST) | GST rate |
|---|---|
| Up to ₹2,500 | 5% |
| Above ₹2,500 | 18% |
Before September 2025 the cut-off was ₹1,000, with 5% below and 12% above. The change, notified in Notification No. 9/2025-Central Tax (Rate), moved most mid-priced Indian fashion to 5%, which is good news for brands selling T-shirts, hoodies and polos.
Worked examples
- A T-shirt sold at ₹799: 5% GST = ₹39.95.
- A hoodie sold at ₹2,499: 5% GST = ₹124.95.
- A jacket sold at ₹2,999: 18% GST = ₹539.82.
- A shirt with MRP ₹2,999 sold at ₹2,399 after discount: the rate follows the actual sale value, so 5%. Discounts shown on the invoice reduce the value.
Pricing tip: a product priced just above ₹2,500 jumps 13 percentage points in tax. If your premium hoodie is planned at ₹2,599, check whether ₹2,499 makes more money after tax.
HSN codes for common garments
| Garment | HSN | Notes |
|---|---|---|
| T-shirts, vests (knitted) | 6109 | 6109 10 00 for cotton |
| Hoodies, sweatshirts, jerseys, pullovers (knitted) | 6110 | 6110 20 for cotton |
| Polo T-shirts, men (knitted) | 6105 | 6106 for women |
| Joggers and track pants (knitted) | 6103 / 6104 | Men / women |
| Shirts, men (woven, like oxford) | 6205 | 6206 for women |
| Track suits (knitted) | 6112 |
The difference between chapter 61 and 62 is the fabric: 61 is knitted (single jersey, fleece, piqué), 62 is woven (poplin, oxford, denim). Both follow the same ₹2,500 rule.
Businesses with turnover up to ₹5 crore must show at least 4-digit HSN codes on B2B invoices, and above ₹5 crore 6 digits. Many brands simply use 8 digits everywhere to stay safe.
Do you need GST registration to start a clothing brand?
It depends on how and where you sell:
- Selling only in your own state, offline: registration is required once turnover crosses ₹40 lakh (₹20 lakh in some special category states).
- Selling to customers in other states, for example through your own website: inter-state supply of goods generally requires registration from day one, regardless of turnover.
- Selling on Amazon, Flipkart, Myntra or Meesho: marketplaces ask for a GSTIN. Since October 2023, small sellers can make intra-state sales through marketplaces without registration under certain conditions, but most brands register anyway to sell across India.
In practice, almost every D2C clothing brand that ships across India registers for GST before launch. Registration is free on the GST portal and usually takes 7–15 working days.
Input tax credit: why your factory's GST invoice matters
When you buy finished garments from a manufacturer, you pay 5% GST to them. When you sell, you charge your customer GST. You can deduct the GST you paid (input tax credit, ITC) from the GST you owe, but only if your supplier gives you a proper GST invoice with your GSTIN on it and files their returns.
Example for 100 T-shirts:
| Value | GST at 5% | |
|---|---|---|
| You buy from factory at ₹263 each | ₹26,300 | ₹1,315 (paid) |
| You sell at ₹799 each | ₹79,900 | ₹3,995 (collected) |
| GST you deposit | ₹2,680 |
Without a GST invoice from your factory, you would deposit the full ₹3,995. That is why we issue a GST invoice on every order; just add your GSTIN when you place the order.
Composition scheme: can a clothing brand use it?
The composition scheme lets small businesses pay a flat 1% on turnover with simpler returns, but it has limits that matter for D2C brands: composition dealers cannot make inter-state supplies and cannot collect GST from customers or claim input tax credit. If you sell online across India, the regular scheme is usually the practical choice. Discuss it with your CA.
Shipping, discounts and returns
- Shipping charged to the customer is part of the value of supply and generally taxed at the same rate as the garment when sold together.
- Discounts given on the invoice reduce the taxable value.
- Returns are adjusted through a credit note, which reduces your GST liability for that period.
A simple GST checklist for new clothing brands
- Register for GST before your first inter-state sale.
- Price products with the ₹2,500 line in mind.
- Use 8-digit HSN codes on invoices (for example 61091000 for cotton T-shirts).
- Buy only from suppliers who give GST invoices with your GSTIN.
- Keep marketplace TCS statements; you can claim the TCS they deduct.
- File GSTR-1 and GSTR-3B on time; late fees add up quickly.
Planning your margins? Our unit economics calculator shows per-piece cost, margin and break-even, and our guide on starting a clothing brand with ₹50,000 covers the rest of the setup.
This article is general information based on rules in force in 2026 and is not tax advice. GST rates and conditions change; confirm with a qualified chartered accountant.
Frequently asked questions
What is the GST rate on T-shirts in 2026?
5% if the sale value is ₹2,500 or less per piece, and 18% above ₹2,500. This applies from 22 September 2025.
What is the HSN code for T-shirts?
6109. Cotton T-shirts use 6109 10 00 and T-shirts of other textile materials use 6109 90.
What is the HSN code for hoodies and sweatshirts?
6110, which covers knitted jerseys, pullovers, sweatshirts and hoodies. Cotton hoodies use 6110 20.
Is GST charged on MRP or selling price?
On the actual transaction value per piece. A discount shown on the invoice reduces the value, so the rate follows the discounted price.
Do I need GST registration to sell clothes online?
If you sell to customers in other states through your own website, registration is generally required from the start. Marketplaces also ask for a GSTIN. Confirm with your CA.