In India, as of late 2025, the Goods and Services Tax (GST) on readymade garments, apparel, and clothing is 12% if the per-unit price is above ₹1,000. While garments costing ₹1,000 or less are taxed at 5%, any item with a higher price tag attracts a 12% rate.
Clothes priced over ₹1,000 attract 12% GST.
To calculate the amount of GST to add to a price, multiply the price by 0.1 (10% in Australia, $1000✕0.1=$100). Then, to calculate the price inclusive of GST, multiply the original price by 1.1 ($1000✕1.1=$1100).
Calculate the GST amount: Multiply the value of the apparel by the applicable GST rate. For instance, if a garment is priced at ₹2,000, the GST amount would be ₹2,000 * 5% = ₹100.
Clothes priced below Rs. 1,000 are exempt from GST, while those priced at Rs. 1,000 or more attract a 5% GST rate. Ready-made garments are taxed at 12% GST, and synthetic or man-made fibers and fabrics face an 18% GST rate.
Example
Garments & Apparel
The GST rate now depends on the price of the final garment. Apparel up to ₹2,500 per piece: The rate stays at an affordable 5%. Apparel above ₹2,500 per piece: The rate climbs from 12% to 18%.
GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. To work out the cost of an item including GST, multiply the amount exclusive of GST by 1.1. To work out the GST component, divide the GST inclusive cost by 11.
If a goods or services is sold at Rs. 1,000 and the GST rate applicable is 18%, then the net price calculated will be = 1,000+ (1,000X(18/100)) = 1,000+180 = Rs. 1,180.
The GST Calculator operates based on a straightforward formula: GST Amount = (Selling Price x GST Rate) / 100. Here, the Selling Price is determined by adding the Cost Price and Profit Amount.
Who is liable to pay GST under the proposed GST regime? Ans. Under the GST regime, tax is payable by the taxable person on the supply of goods and/or services.
Readymade garments of sale value exceeding Rs. 1000 per piece attract 12% GST.
Effective October 1st, 2025, a new set of rules for GST return filing will come into effect. This marks the first filing cycle under the GST 2.0 reforms, aimed at improving transparency, control, and accuracy in Input Tax Credit (ITC) management through the Invoice Management System (IMS).
Clothes: GST by price, not style
GST on readymade garments is based on price. If the garment costs less than ₹1,000, GST is 5%. If it costs ₹1,000 or more, GST is 12%. So, buying two shirts priced at ₹999 each means you pay less GST than buying one shirt priced at ₹1,001 — even if your total spend is the same.
18% GST is levied on higher-value goods, textiles, certain machinery, and household appliances.
With the free GST calculator, you can calculate the tax amount in three simple steps. The tool provides you with three fields that have to be filled, and it calculates GST automatically based on what you fill in. Enter the price of the goods or services in the Amount field.
Key items exempted from GST:
Understanding GST Rate Reduction
Starting September 22, 2025, the GST Council reduced the number of tax slabs from four to two main rates: 5% merit rate for essential and priority items and 18% standard rate for most other goods and services. There is also a special 40% rate for luxury and sin goods.
If you only have G.S.T, which is 7%, then you would calculate the price after taxes by multiplying by 1.07. So a $200 item would cost 1.07 x $200 = $214 after G.S.T. To calculate how much G.S.T. was paid on a $214 item, simply reverse the calculation by dividing by 1.07, as $214/1.07=$200.
List of exempted goods under GST in India: