Cloth HSN Code Explained: How Textile Businesses Can Apply the Right GST

For textiles and garments, HSN codes fall broadly under Chapters 50 to 63, covering everything from raw fibres to finished clothing.

• Chapters 50-55: Natural and man-made fibres and yarns (typically 5% or 12%, depending on processing)
• Chapters 52-60: Fabrics (woven, knitted, crocheted) (generally 5% GST)
• Chapters 61-63: Ready-made garments and textile articles (5% or 12% based on value)

Apart from product classification, GST rates on clothes and garments in India also depend on the item’s price. Clothes priced up to ₹1,000 attract 5% GST, while those priced above ₹1,000 are taxed at 12% GST.

Cloth HSN code: Defining each classification

Textile classification depends on three main factors: Material (cotton, wool, synthetic), construction (woven or knitted) and product type (fabric or finished garment). Here’s a breakdown of commonly used classifications:

Common cloth HSN codes for fabrics and garments (chapter-wise breakdown)

To simplify classification for day-to-day use, the table below groups the most commonly used cloth HSN codes across fabrics and ready-made garments. It helps textile businesses quickly identify the correct HSN based on product category, material type and garment production.

Note: The 8-digit HSN codes listed above are indicative and can vary depending on factors such as fabric composition, material blend, product design, and end use. You should verify the exact HSN classification as per GST notifications to ensure accurate tax compliance.

How to choose the right HSN code for clothes

Keep the following in mind when looking for the accurate classification and cloth HSN code:

1. Identify the product type


Start by determining whether you are dealing with fabric or a finished garment. Fabrics are classified under Chapters 52 to 60, while ready-made clothing falls under Chapters 61 and 62. If you are selling unstitched cotton cloth, for instance, it will be treated as fabric under Chapter 52. However, a stitched cotton shirt will be classified as apparel under Chapter 62.

2. Check the material


The fibre composition, such as cotton, wool, silk, or synthetic, has a major role in deciding the correct HSN code. For example, a cotton shirt and a polyester shirt may look similar, but they are classified under different subcategories because of the difference in material.

3. Consider the production process

You should also assess whether the product is knitted or woven. For example, a t-shirt made from knitted fabric is classified under Chapter 61, whereas a formal shirt made from woven fabric falls under Chapter 62.

4. Evaluate the product value


For garments, GST rates depend on the price per piece. This makes pricing an important factor in tax calculation. For instance, a t-shirt priced at ₹900 will attract 5% GST, but if the price increases to ₹1,200, the GST rate becomes 12%.

5. Refer to official GST notifications


Finally, always verify the classification using the latest GST notifications, as rates and rules may change over time.


Conclusion

From fabric classification to garment pricing thresholds, each detail affects taxation and reporting. As your business grows, it can be challenging to manage multiple HSN codes, GST rates, and invoices manually. This is where tools like TallyPrime can help streamline operations. With built-in GST compliance, automatic HSN code mapping and accurate invoicing, TallyPrime ensures your textile business stays compliant while saving time and effort.