India’s 56th GST Council recommendations raised the 5% GST threshold for covered readymade garments and made-ups from ₹1,000 to ₹2,500 per piece. The Clothing Manufacturers Association of India (CMAI) welcomed that change and lower rates on man-made fibres and yarns, but says garments priced above ₹2,500 remain subject to a higher rate and wants that rate reduced or the threshold made more realistic.
What changed in GST for garments and textiles?
The Press Information Bureau’s account of the 56th GST Council meeting says the recommendations set a 5% rate for covered readymade garments and made-ups priced at or below ₹2,500 per piece, up from the earlier ₹1,000 threshold. It also reports reductions in GST on man-made fibres and yarns.
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| Product or price band | Earlier rate or threshold | Recommendation reported by PIB |
|---|---|---|
| Covered readymade garments and made-ups priced at or below ₹2,500 per piece | 5% applied up to ₹1,000 per piece | 5% up to ₹2,500 per piece |
| Man-made fibres | 18% | 5% |
| Man-made yarns | 12% | 5% |
| Covered garments priced above ₹2,500 per piece | Not stated in the cited PIB summary | CMAI says these garments remain at a higher rate; the cited summary does not specify that rate |
The Council’s recommendations are not, by themselves, a complete guide to the tax treatment of every clothing item. The applicable legal notification and tariff classification determine how a particular product is treated. The PIB summary does not resolve classification-specific questions.
Why does CMAI still object to the rate on garments above ₹2,500?
CMAI welcomed the higher 5% threshold and the changes it says help address the inverted duty structure and support fibre neutrality. Its remaining concern is that garments above ₹2,500 per piece continue to face a higher rate, which it sees as friction in the fibre-to-garment value chain.
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CMAI President Santosh Katariya asked the Council to reduce that rate or set a more realistic threshold. In the association’s statement, he said: “We earnestly request the Council to remove this anomaly, and either place all garments, irrespective of the price, at 5%, or fix a more reasonable and realistic price level.” The statement appeared in the September–October 2025 issue of Knitting Views.
CMAI argues that the higher-price band includes clothing bought by ordinary and middle-class consumers, including woolens, occasion wear, traditional Indian clothing, handlooms and embroidered garments. That is the association’s case for changing the threshold; the cited statement does not establish these categories’ spending patterns through independent consumer data.
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What does the government say the reforms are meant to achieve?
The PIB account says the recommendations aim to remove distortions in the textile value chain, lower production costs, support demand and exports, and improve competitiveness. The fibre and yarn rate reductions are presented as part of that effort. These are the government’s stated objectives, distinct from CMAI’s argument that the higher rate on garments above ₹2,500 still weighs on consumers and the industry.
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What sales effects has CMAI reported?
In its October 2025 activity report, CMAI quoted Chief Mentor Rahul Mehta estimating the following changes. The figures are association-reported estimates, and the cited passage does not provide enough methodology to establish them as independently verified or nationally representative.
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| Category | Reported change | Attribution and comparison |
|---|---|---|
| Ethnic and festive wear | 15% decline | Rahul Mehta, quoted by CMAI; during the festival season |
| Branded garments priced above ₹2,500 | 5–7% decline | Rahul Mehta, quoted by CMAI; the reported category was garments above the threshold |
| Products priced below ₹2,500 | 7–8% growth | Rahul Mehta, quoted by CMAI; compared with the previous Diwali |
These estimates describe CMAI’s account of sales trends, not a verified measure of the GST change’s causal effect. The report passage does not establish that the tax treatment alone produced the reported movements.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How should consumers interpret the ₹2,500 threshold?
The threshold is a per-piece price distinction for the covered readymade garments and made-ups described in the PIB summary. A retail price alone does not establish the correct GST classification or rate for every apparel product. For a specific item, the relevant legal notification and tariff classification matter; the Council summary should not be treated as product-specific tax advice.
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CMAI’s advocacy also predates the 2025 recommendations: in December 2024, the association opposed a reported proposal to increase rates and said it was approaching government and media. That earlier position is background to its continued tax advocacy, not the same policy as the later recommendations.
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