GST on Cotton, Yarn, Silk, Wool and Nylon

for all goods has been notified by the GST Council based on HSN codes.

or Harmonised System Nomenclature is an international system for classifying goods in the course of international trade. The GST rate for Cotton, yarn, silk, wool and nylon fall under different chapters of the HSN code and a rate of 0% or 5% or 12% or 18% or 28% could be applicable, based on the HSN classification. In this article, we look at the HSN code for Cotton, yarn, silk, wool and nylon in detail.

GST Rate for Cotton

Cotton is classified under chapter 52 of the HSN code. Accordingly, goods made out of Cottons like Gandhi topi and khadi yarn are exempt from GST. All other cotton and cotton goods as under attract 5% GST.

Cotton
Cotton waste
Sewing thread produced by Cotton
Cotton yarn, other than khadi yarn
Cotton fabrics [With no refund of ITC accumulation]

GST Rate for Silk

Silk is classified under chapter 50 of the HSN code system. Silkworm laying, cocoon, raw silk and silk waste are exempt from GST. Other silk and silk products as under would attract 5% GST:

Silk yarn
Woven fabrics of silk or silk waste [With no refund of ITC accumulation]

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GST Rate for Wool

Wool, fine or coarse animal hair; horsehair yarn and woven fabric are classified under chapter 51 of the HSN code. Fine or coarse animal hair, not carded or combed and waste of wool or fine or coarse animal hair is exempt from GST. The following wool and animal hair is taxed at 5% GST rate:

Garnetted stock of wool or fine or coarse animal hair, shoddy wool
Wool and fine or coarse animal hair, carded or combed
Yarn of wool or animal hair
Fabrics of wool or animal hair [With no refund of ITC accumulation]

GST Rate for Nylon and Artificial Fibres

GST rate for nylon and other artificial fibres are classified under chapter 54 of the HSN code along with man-made filaments and strip the like of man-made textile materials. Under this chapter, all items are taxed at 5% or 18%. Fabrics of man-made textile materials [With no refund of ITC accumulation] is taxed at 5% GST. All other products as under are taxed at 18% GST:

Synthetic filament yarn such as nylon, polyester, acrylic, etc.
Artificial filament yarn such as viscose rayon, Cuprammonium, etc.
Sewing thread of man-made filaments

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Frequently Asked Questions

Common questions about GST Rates on Cotton, Silk, Wool, Nylon.

The GST rate for cotton and cotton products varies based on their classification under the Harmonized System of Nomenclature (HSN) code. Cotton and cotton products like Gandhi topi and khadi yarn are exempt from GST. However, other cotton and cotton goods such as cotton waste, sewing thread produced by cotton, cotton yarn (except khadi yarn), and cotton fabrics attract a GST rate of 5%, with no refund of Input Tax Credit (ITC) accumulation.

No, silk products are not entirely exempt from GST. While silkworm laying, cocoons, raw silk, and silk waste are exempt from GST, other silk and silk products such as silk yarn and woven fabrics of silk or silk waste attract a GST rate of 5%, with no refund of ITC accumulation.

The GST rate for wool and animal hair products varies based on their classification under the HSN code. Fine or coarse animal hair, not carded or combed, and waste of wool or fine or coarse animal hair are exempt from GST. However, garnetted stock of wool or fine or coarse animal hair, shoddy wool, wool and fine or coarse animal hair (carded or combed), yarn of wool or animal hair, and fabrics of wool or animal hair attract a GST rate of 5%, with no refund of ITC accumulation.

No, the GST rate for nylon and artificial fibers varies based on their classification under the HSN code. Fabrics of man-made textile materials are taxed at 5% GST, with no refund of ITC accumulation. However, synthetic filament yarn (such as nylon, polyester, acrylic), artificial filament yarn (such as viscose rayon, cuprammonium), and sewing thread of man-made filaments are taxed at 18% GST.

The Harmonized System of Nomenclature (HSN) code is an international system used for classifying goods in the course of international trade. The GST Council has notified the GST rates for all goods based on their respective HSN codes. The HSN code classification plays a crucial role in determining the applicable GST rate for cotton, yarn, silk, wool, nylon, and other textile products.

Yes, according to the article, certain textile products are exempt from GST. These include Gandhi topi and khadi yarn (classified under cotton), silkworm laying, cocoons, raw silk, and silk waste (classified under silk), and fine or coarse animal hair, not carded or combed, and waste of wool or fine or coarse animal hair (classified under wool).

The phrase "with no refund of ITC accumulation" refers to the Input Tax Credit (ITC) mechanism under the Goods and Services Tax (GST) system. It indicates that for certain textile products, such as cotton fabrics, woven fabrics of silk or silk waste, and fabrics of wool or animal hair, the GST rate is applicable without the benefit of claiming a refund for the accumulated ITC.

No, textile products do not fall under the same GST rate. The article clearly mentions that the GST rate for cotton, yarn, silk, wool, nylon, and other textile products varies based on their classification under different chapters of the HSN code. The applicable GST rates can be 0% (exempt), 5%, 12%, 18%, or 28%, depending on the specific product and its HSN classification.

The Harmonized System of Nomenclature (HSN) is an international system used for classifying goods in the course of international trade. It is not specific to the Goods and Services Tax (GST) system but is widely used for various purposes, including applying customs duties, collecting trade statistics, and monitoring controlled products.

Yes, the GST rates for textile products, including cotton, yarn, silk, wool, nylon, and other textile materials, can change in the future. The GST Council, which is the governing body for GST in India, has the authority to review and revise the GST rates for different goods and services based on various factors, such as economic considerations, policy changes, or industry representations.