GST on Clothes and Footwear: The ₹2,500 Rule Explained

Unlike most goods, clothes and shoes do not have a single GST rate. GST on clothes depends on what each piece sells for: garments and footwear priced up to ₹2,500 carry 5%, and anything above that carries 18%. The threshold moved with the GST 2.0 changes of 22 September 2025, and it is applied to each piece, not to the bill. This guide explains the rates, how the per-piece test works, and why fabric is treated differently.

GST on clothes and footwear: the rates

Item	Value per piece	GST rate
Readymade garments (shirts, kurtas, jeans, dresses, jackets)	Up to ₹2,500	5%
Readymade garments	Above ₹2,500	18%
Made-up articles (bedsheets, curtains, towels, shawls)	Up to ₹2,500	5%
Made-up articles	Above ₹2,500	18%
Footwear	Up to ₹2,500 per pair	5%
Footwear	Above ₹2,500 per pair	18%
Fabric sold by the metre	Any	5% (generally)

Within a state, the 5% shows as 2.5% CGST and 2.5% SGST, and the 18% as 9% each. On an inter-state sale, the whole rate is charged as IGST. See CGST, SGST and IGST for why the split exists. For the HSN headings behind each line, see the HSN code for clothes and garments.

What GST 2.0 changed

The GST 2.0 rate rationalisation removed the 12% slab and moved most goods to 5% or 18%. For clothing, that meant two changes at once:

• The threshold rose from ₹1,000 to ₹2,500. Garments between ₹1,000 and ₹2,500, the bulk of everyday branded clothing, dropped from 12% to 5%.
• Above the threshold, the rate rose from 12% to 18%. A ₹4,000 jacket now carries more tax than it did before.

Footwear followed the same pattern, with the ₹2,500 per pair line and 5% or 18% on either side. For most households, whose purchases cluster below ₹2,500 per item, the net effect was a cut. For premium apparel and footwear, it was an increase.

How the per-piece value test works

The threshold is tested against the sale value of each piece, meaning the transaction value before GST. Three examples make it concrete:

Purchase	Value per piece	Rate	GST
3 T-shirts at ₹900 each	₹900	5%	₹135 in total
1 pair of trousers at ₹2,500	₹2,500	5%	₹125
1 blazer at ₹6,000	₹6,000	18%	₹1,080
1 pair of sports shoes at ₹3,200	₹3,200	18%	₹576

Note that ₹2,500 itself is inside the 5% band; the 18% applies to pieces priced above it. A bill with many low-priced items does not move into 18% just because the total crosses ₹2,500.

Shops that print tags inclusive of GST work backwards: a tag of ₹2,625 at 5% corresponds to a taxable value of ₹2,500, so it is still in the lower band. A tag of ₹2,700 would put the taxable value above ₹2,500 at either rate, so it falls into 18%. The general method is in how to calculate GST.

Discounts, combos and sale prices

Because the rate follows the transaction value, a discount shown on the invoice can move an item into the lower band. A dress tagged at ₹3,200 and sold at 25% off for ₹2,400 is taxed at 5% on ₹2,400.

Combo offers are less clear-cut. Where a "buy two for ₹4,000" deal is billed as two items at ₹2,000 each, each piece is in the 5% band. Where a set is sold and billed as a single unit, such as a suit, the value of the set is what gets tested. If you are a seller, the safe course is to bill each piece at its own price and let the rate follow from that.

Readymade garments vs fabric

Fabric bought by the metre, whether cotton, silk, wool, linen or synthetic, is generally taxed at 5% with no price threshold. That is why buying cloth and getting it stitched can work out differently from buying a readymade piece of the same value: the cloth is always 5%, while a readymade garment above ₹2,500 is 18%.

Yarn and fibres feeding the textile chain were also aligned with lower rates under GST 2.0, which reduced the long-standing problem of input tax being higher than output tax for many garment makers.

Tailoring and stitching charges

A tailor stitching your own cloth is providing a service rather than selling a garment. Small tailors are often below the GST registration threshold and charge no GST at all. A registered tailoring business will charge GST on the stitching charge at the rate applicable to that service; ask for it to be shown on the bill. Where a boutique sells you a finished, stitched outfit, it is a sale of a garment, and the per-piece threshold applies to the full price.

Buying clothes online

Marketplaces and brand websites apply the same per-piece rates. The only difference is the split: an order shipped from a warehouse in another state shows IGST rather than CGST and SGST. Prices on these sites are usually shown inclusive of GST, and the invoice in your order history breaks out the tax.

Sellers on these platforms need a GSTIN to sell; our guide on GST for e-commerce sellers covers the registration side.

Checking the GST on a clothing bill

A proper GST invoice from a clothing or footwear store should show:

• the store's 15-character GSTIN, name and address;
• each item with its HSN code, unit price, any discount and the rate applied;
• the GST split into CGST and SGST, or IGST.

If an item under ₹2,500 shows 18%, or the GSTIN on the bill does not look right, look it up. It should be Active and the name should match the shop. Our guide on whether the GST on your bill is real walks through it. Retailers and brands buying from many fabric and garment suppliers can do the same check in bulk with a GSTIN verification API.

Frequently asked questions

What is the GST on clothes?

Since 22 September 2025, readymade garments and made-up textile articles priced up to ₹2,500 per piece are taxed at 5% GST. Pieces priced above ₹2,500 are taxed at 18%. Before GST 2.0 the dividing line was ₹1,000, with 5% below it and 12% above.

What is the GST on footwear?

Footwear priced up to ₹2,500 per pair is taxed at 5%. Footwear above ₹2,500 per pair is taxed at 18%. Before 22 September 2025, the dividing line was ₹1,000 per pair.

Is the ₹2,500 limit applied to the whole bill or per item?

Per piece, or per pair for footwear. The test looks at the sale value of each item, not the total bill. A bill with four shirts at ₹2,000 each, totalling ₹8,000, is taxed at 5% on every shirt.

Is the ₹2,500 limit before or after GST?

The test is applied to the transaction value, which is the price before GST is added and after any discount given on the item. If a jacket is sold for ₹2,400 plus GST, it is within the 5% band even though the customer pays more than ₹2,500 in total.

What is the GST on fabric?

Cotton, silk, wool and synthetic fabrics sold by the metre are generally taxed at 5%, whatever the price. The price threshold applies to readymade garments and made-up articles, not to fabric.

Do shops charge 18% on discounted clothes?

They should not if the discounted price brings the item to ₹2,500 or less. The rate follows the actual transaction value of the piece. A shirt with a tag of ₹3,000 sold at ₹2,200 after a discount shown on the invoice falls in the 5% band.