In Lok Sabha Unstarred Question No. 2509, answered on Monday, December 15, 2025, regarding Change in GST Rate on Readymade Garments, the Minister of State in the Ministry of Finance (Shri Pankaj Chaudhary) informed the House about the recent GST rate rationalisation measures undertaken on the recommendations of the GST Council.
The Minister stated that the 56th meeting of the GST Council recommended a simplified two-rate structure for apparel and textile products by removing the existing 12 per cent slab. Accordingly, GST on articles of apparel, clothing accessories and other made-up textile articles with a sale value exceeding ₹2,500 per piece has been increased from 12 per cent to 18 per cent. Simultaneously, the threshold for the concessional GST rate of 5 per cent has been enhanced from ₹1,000 per piece to ₹2,500 per piece, thereby extending the benefit of the lower rate to a wider range of garments.
To protect traditional and labour-intensive segments, the Minister informed that GST on handmade and hand-embroidered shawls has been retained at 5 per cent, with removal of the threshold limit. Other hand-embroidered articles such as embroidery strips, motifs and handmade lace continue to attract GST at 5 per cent. These measures are expected to improve affordability, stimulate consumption demand and sustain employment in the garment sector, which is predominantly labour intensive.
The revised GST rates were implemented with effect from 22 September 2025. Post rate rationalisation, gross GST revenue collection for October 2025 amounted to ₹1,95,936 crore, reflecting a 4.6 per cent growth over the corresponding period last year, indicating stable revenue performance alongside structural reforms.
Further, the Minister highlighted that based on GST Council recommendations, GST on man-made fibres and yarns has been reduced to 5 per cent from the earlier rates of 18 per cent and 12 per cent, respectively. This reduction is expected to enhance the competitiveness of MSME textile manufacturers and exporters.
These GST reforms are supported by major Government initiatives such as PM Mega Integrated Textile Regions and Apparel (PM MITRA) Parks Scheme, Production Linked Incentive (PLI) Scheme for textiles, National Technical Textiles Mission, SAMARTH skilling programme, Silk Samagra-2, National Handloom Development Programme, and schemes for handicrafts development. Export support is further provided through RoSCTL and RoDTEP schemes, ensuring holistic development of the textile and apparel sector.
The Reply can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2025/12/Change-in-GST-Rate-on-Readymade-Garments.pdf
