written by Khatabook | December 15, 2021

GST Rate & HSN Code: Articles of Apparel and Clothing Accessories

HSN is an abbreviation for the Harmonized System of Nomenclature. The WCO (World Customs Organization) established HSN in 1988. Since then, five adjustments have been made all over the world. More than 5000 items are listed in the HSN code, used in more than 150 countries. This 6-digit HSN code can be used to identify over 5,000 different commodities and can also be used to define tax aims. Later, Customs and Central Excise added two extra digits to the HSN code to classify goods under GST. Therefore, let's know more about readymade garments HSN code, clothing HSN code and more, along with their GST rates in this article.

Use of HSN Code and GST

  • The WCO presently monitors more than 95% of the industry. 
  • Following the establishment of the Goods and Service Tax (GST), India's enactment of the HSN code puts the country on a level with other countries using HSN for years. 
  • To standardise GST, India used the HSN code. This has also reduced the cost of international trade by bringing trade processes closer together. 
  • The HSN encourages every Indian taxpayer to look into the GST rate by using the code. 
  • As a result, the system automatically computes the GST tax rate applicable to the products, shortening and clarifying India's trade-related techniques. 
  • The correct search HSN codes must be considered throughout the GST Return filing process.

Fundamentals of HSN Codes and GST

HSN Codes- There are 2 digits codes, 4 digits codes, 6 digits codes, and 8 digits codes under the present Harmonised System of Nomenclature (HSN) adopted by the Indian Government.

GST- The GST council fixes five types of Goods and Services Tax (GST) rates for all kinds of products or services. These are:

  1. 0%
  2. 5%
  3. 12%
  4. 18%
  5. 28%

Importance of HSN Code

The adoption of the HSN Code system in the country is important due to the following reasons:

  1. It helps the business community in the country to properly understand the domestic and international market and their products.
  2. It helps in the import and export of various products and services smoothly. This is because the Customs authorities worldwide can easily identify the goods by checking the HSN Code, thereby, proper implementation of duty/tax can be incorporated
  3. It helps the Government to understand the demand and supply position of various goods and services within the country in a better manner.
  4. It also helps the Government understand the need for import or export of goods of a particular type of essential items or goods and services in general and formulate the policies for regulating the trade flow of goods with different countries of the world in a better way.
  5. It also helps in the systematic collection of data of various products and services for statistical purposes. The government can use these data, the public, or a business or student community for different needs and utilisation.

How does HSN work for different businesses?

The Government has prescribed the following guidelines for the use of 2 digits or 4 digits or 6 digits or 8 digit codes by the trade and industry in India:

  1. There is no need to adopt or use any HSN code by the business entity if the annual turnover is less than Rs. 1.50 Crores. However, it is advisable to use 2 digits or 4 digits code for better synchronisation with the GST system of the Government for smooth filing of Returns or other information on the GST Portal.
  2. If the business turnover is Rs. 1.50 Cr. or more but less than Rs. 5.00 Crore, it is mandatory to use a minimum of 2 digits HSN Code, but the business entity can use 4 digits or higher code as well.
  3. If the business turnover is Rs. 5.00 Cr. or more, it is mandatory to use a minimum of 4 digits HSN Code, but the business entity can also use 6 digits or higher code.
  4. It is always advisable to use 8 digits code for import and export-related transactions for better understanding by the Customs Authorities worldwide.

Where is HSN Code present in different documents?

It is mandatory to write HSN Code on various business documents such as:

  1. On every Invoice against the Item name or product/service description.
  2. On all GST Returns and forms, wherever it is mentioned to write HSN Code.
  3. On all purchase orders containing the details of items/products being given to Suppliers.
  4. On all export documents like Tax Invoice, Commercial Invoice, Shipping Bill, Certificate of Country of Origin, etc.
  5. On Bill of Entry (BOE) at the time of import of goods at the relevant place.
  6. On any other document(s) as may be prescribed by the Government.

Also Read: List Of Goods Exempted Under GST in India with HSN Code

GST Rate and HSN Code: For Articles of Apparel and Clothing Accessories, Knitted or Crocheted

The Government has prepared an HSN Code list for the levy of GST on different products and services. Let us examine the HSN code list for various apparel and clothing accessories, knitted or Crocheted as under.

These items fall under Chapter 61 with the following subheadings:

HSN Code

Clothing Items

GST Rate 

HSN Code 6101

This list includes Men’s or Boys’ Coats, Overcoats, carcoats, capes, cloaks, anoraks (including ski jackets), wind-cheaters, wind jackets, and similar knitted or crocheted products for men or boys, other than those falling under chapter heading 6103.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6102

This list includes Women’s or Girls’ Coats, Overcoats, carcoats, capes, cloaks, anoraks (including ski jackets), wind-cheaters, wind jackets, and similar knitted or crocheted products for women or girls, other than those falling under chapter heading 6104.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6103

This List includes Men’s or Boys’ Suits, ensembles, jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted or crocheted, for men or boys.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6104

This list includes ladies and girls’ Suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches, shorts (other than pool wear), knitted or crocheted, for women or girls.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6105

This List includes Shirt HSN Code, whether knitted or crocheted for men or boys.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6106

 

This list includes knitted or crocheted blouses, shirts, and shirt-blouses for women or girls.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6107

This list includes men's or boys' underpants, briefs, nightshirts, pyjamas, bathrobes, dressing gowns, and related articles knitted or crocheted.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6108

This list includes ladies' and girls’ slips, petticoats, briefs, panties, nightdresses, pyjamas, negligees, bathrobes, dressing gowns, and similar knitted or crocheted accessories for women or girls.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

6109 HSN Code

This list is meant for knitted or crocheted T-shirts, singlets, and various vests.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6110

 

This list is meant for knitted or crocheted jerseys, pullovers, cardigans, waistcoats, and related goods.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6111

 

This list is meant for knitted or crocheted outfits and accessories for babies.

 

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6112

This list is meant for knitted or crocheted tracksuits, ski suits, and swimming.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6113

This list is meant for Clothes Made Of Knitted Or Crocheted.

 

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6114

 

This list is meant for other garments, knitted or crocheted. 

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6115

This list includes Pantyhose, tights, stockings, socks, and other hosiery, knitted or crocheted, including graduated compression hosiery (for example, stockings for varicose veins) footwear without applied soles.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6116

 

This list includes Gloves, mittens, and mitts, knitted or crocheted.

 

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

HSN Code 6117 

This list is meant for HSN code on garments, i.e. knitted or crocheted garments; knitted or crocheted pieces of garments or clothing accessories.

  1. 5% for products having sales price up to Rs. 1000/- per piece.
  2. 12% for products having sales price more than Rs. 1000/- per piece.

Thus, Chapter 61 of the HSN Code list deals with GST on Clothes in India, and most of these rates are effective from 01.07.2017, i.e., the date of introduction of the GST regime in the country. There are further subdivisions of these chapter headings into 8 digit codes. These clothes are divided into different categories based upon the material or fabric used in their preparation, like cotton, silk, wool, animal hair, synthetic fibre, etc.

Disclaimer: The clothes GST rates and HSN Code list is given above are based upon the latest available information. However, the reader must reconfirm the same from the official website of the Government of India before entering into any business transaction to see if there is any change in the GST rate or HSN Code list.

However, there is an important point to be noted that in the recent steps taken by CBIC a rate hike has been announced on man-made fabrics, yarn, fabric which will be effective from 01.01.2022. 

  • As per this latest amendment, the GST Rate on fabrics has increased from 5% to 12% whereas GST on apparel of any value has also increased to 12%. 
  • Previously, garments up to ₹1000 were subject to 5% GST. The GST rate for textiles, which include synthetic yarn, fabrics, and other man-made items has increased to 12% from the previous 5%.

Also Read: How HSN And NIC Codes Help Your General Stores

Conclusion

HSN codes play a crucial role in classifying goods worldwide in a systematic and logical manner. In this article, we have identified that a GST rate of 5% is applicable for clothes having sales price up to Rs. 1000/- per piece and a GST rate of 12% is applicable for clothes having a sales price of more than Rs.1000/- per piece. However, effective 01.01.2022, the revised GST rates on fabrics has increased from 5% to 12% whereas GST on the apparel of any value has also increased to 12%. Therefore, understanding HSN Codes and their GST rates and their use can aid individuals involved in the business of manufacturing or trading clothes.

We hope the article has given you the relevant information regarding GST on Clothes in India, HSN Code for Garments, etc.

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FAQs

Q: Are there any revisions in rates of GST on clothes. If yes, how much?

Ans:

 The GST Rate on fabrics has increased from 5% to 12% whereas GST on the apparel of any value has also increased to 12%. These revised rates are effective from 01.01.2022.

Q: Is there any difference between HSN Code and SAC Code?

Ans:

Yes, HSN Code is used for identifying & classification of goods, whereas SAC (Service Accounting Code) is used for the identification/classification of services.

Q: Is there any relief for garment exporters?

Ans:

Yes, there is no GST on garments meant for export. Hence a garment exporter need not pay any GST.

Q: Are the cloth GST rates fixed?

Ans:

The cloth GST rates have been fixed by the GST Council and are effective from 01.07.2017, the date of introduction of the GST regime in India. However, the GST council can change these rates if required.

Q: How to find the correct rate of GST for a variety of garments or related items?

Ans:

 The rates of GST on clothes in India are mostly covered by Chapter 61, as mentioned in this article. One must also refer to chapter 62 and other related chapters for finding the correct GST rate applicable to his product before entering into any business transaction. 

Q: What is the general rate of GST on clothes?

Ans:

GST rate of 5% is applicable for clothes having sales price up to Rs. 1000/- per piece. And a GST rate of 12% is applicable for clothes having a sales price of more than Rs.1000/- per piece.  

Q: Is it mandatory to use the HSN code for clothes on the Invoice?

Ans:

 Yes, it is mandatory to use HSN Code on every Tax Invoice and Commercial Invoice.

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