Lok Sabha Question No. 2509 (UNSTARRED), answered on 2025-12-15
Subject: Change in GST Rate on Readymade Garments
Ministry: FINANCE
Asked by: Shri Gurmeet Singh Meet Hayer

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE LOK SABHA UNSTARRED QUESTION NO. 2509

## TO BE ANSWERED ON MONDAY, DECEMBER 15, 2025/AGRAHAYANA 24, 1947 (SAKA)

## CHANGE IN GST RATE ON READYMADE GARMENTS

## 2509. SHRI GURMEET SINGH MEET HAYER:

## Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has made any changes in the GST rate on readymade  garments and textile accessories, resulting in increasing  tax  from  12  per  cent  to  18  per  cent  on  items  priced above Rs. 2,500 per piece, if so, the rationale for selecting the 2,500 threshold;
- (b)  whether  any  assessment  was  made  of  its  likely  impact  on affordability  for  middle-class  consumers  affordability,  organized retail  and  labour-intensive  garment  units,  if  so,  the  details  80 thereof;
- (c)  whether  the  Government  has  any  estimates  of  the  additional revenue generated by this rate increase and the manner in which it is  expected  to  be  offset  by  a  potential  slowdown  in  demand  or
- production in the affected segments, if so, the details thereof; and
- (d)  whether  any  support  measures  for  lower  GST  slabs  for  small textile/handloom units, incentive schemes or demand boosting have been proposed to offset adverse impact of the said GST change on traditional  textile  workers,  artisans,  and  domestic  manufacturers and if so, the details thereof?

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## ANSWER (SHRI PANKAJ CHAUDHARY)

(a),  (b)  and  (c)  As  per  Article  279-A  GST  Council,  in  its  56 th   GST Council meeting, while recommending a simplified two slab structure  by  removal  of  existing  12%  slab,  had  recommended  to increase  GST  rate  from  12%  to  18%  on  articles  of  apparel  and clothing  accessories  and  other  made-up  textile  articles  of  sale value exceeding Rs 2500 per piece. Further, the Council recommended to increase the threshold value for concessional rate of GST of 5% on articles of apparel and clothing accessories from

Rs 1000 per piece to Rs 2500 per piece. Moreover, the GST rate on handmade/ hand embroidered shawls has been retained at 5% and the  threshold  value  limit  for  the  same  has  been  removed.  Hand embroidered articles such as embroidery in strips/ motifs, handmade lace etc continue to attract 5% GST. This is expected to improve  affordability  and  stimulate  consumption  demand  which, given  the  labour-intensive  nature  of  garmenting,  will  sustain  and expand  employment.    The  changes  in  rates  recommended  by  the GST  Council  have  been  implemented  by  the  Central  Government with effect from 22 nd September 2025. Following the rate rationalization  in  September,  the  gross  Goods  and  Services  Tax (GST)  revenue  collected  for  October  2025  is  ₹1,95,936  crores, registering a 4.6% increase compared last year.

(d) Based on the recommendations of the GST Council the GST rate has been reduced to 5% on manmade fibres and yarns from 18% and 12% respectively. This is expected to increase the competitiveness of MSME textile manufacturers and exporters.

This  rate  reduction  is  further  supplemented  by  existing  major schemes/initiatives of the Government including PM Mega Integrated Textile Regions and Apparel (PM MITRA) Parks Scheme to  create  a  modern,  integrated,  world  class  textile  infrastructure; Production Linked Incentive (PLI) Scheme focusing on MMF Fabric, MMF Apparel and Technical Textiles to boost large scale manufacturing and enhancing competitiveness; National Technical Textiles  Mission  focusing  on  Research  Innovation  &  Development, Promotion and Market Development;  SAMARTH  -  Scheme  for Capacity  Building  in  Textile  Sector  with  the  objective  providing demand driven, placement oriented, skilling program; Silk Samagra2  for  comprehensive  development  of  sericulture  value  chain  and National Handloom Development Program for end to end support for handloom  sector.  Ministry  of  Textiles  is  also  implementing  the National  Handicrafts  Development  Programme  and  Comprehensive Handicrafts Cluster Development Scheme for promotion of handicrafts.

Further, the Government is also administering the remission schemes of Rebate of State and Central Taxes and Levies (RoSCTL) for  Apparel/Garments  and  Made-ups  and  the  Remissions  of  Duties and  Taxes  on  Exported  Products  (RoDTEP)  Scheme  for  other textiles products.

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