Home / Blog

GST for tailors and boutiques in India (2026): rates, registration and invoices

Published 29 October 2026 · Updated 30 October 2026

GST confuses tailors for a simple reason: a tailoring shop often does two different things. Stitching a customer's own cloth is a service. Selling a finished garment made from your own fabric is a sale of goods. The two follow different rules, and many shops do both across the same counter.

This guide explains both in plain language, as the rules stand in October 2026. It is not tax advice. Rules and rates change, so check the details with your CA or GST practitioner before you register or change how you bill.

The short answer

• Stitching the customer's own cloth: GST at 5%.
• Selling a garment made from your own fabric: 5% if the price of the piece is ₹2,500 or less, 18% if it is more.
• Fabric you sell by the metre: 5%.
• When you must register: once your total turnover for the year crosses ₹20 lakh (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura), or as soon as you send goods to a customer in another state.

Stitching is a service, taxed at 5%

When a customer brings her own fabric and you stitch it, you are supplying a service. Tailoring services have been taxed at 5% (2.5% CGST plus 2.5% SGST) since January 2018. The GST rate changes of 22 September 2025 kept that rate the same.

Some websites still say tailoring is taxed at 18%. That was the rate for the first few months of GST in 2017, and it has not applied since January 2018.

The 5% applies whatever the price of the stitching. A ₹300 blouse and a ₹12,000 lehenga are both at 5% if the customer supplied the fabric. Small materials you add along the way, such as lining, thread, hooks or piping, do not change this. The job is still a stitching service.

Selling garments is a sale of goods

When you supply the fabric and hand over a finished garment, such as a ready kurti from your rack or a lehenga made from your own fabric, you are selling a garment. Since 22 September 2025, garments are taxed by the sale value of each piece:

Before September 2025 the cut-off was ₹1,000, and garments above it were taxed at 12%. If your billing still uses those numbers, it is out of date.

Three things to get right:

• The limit is per piece, not per bill. A bill with three kurtis at ₹1,500 each is three pieces at 5%, not one sale of ₹4,500.
• The value is before GST and after any discount on the bill. A ₹2,800 kurta with a ₹400 discount on the bill is a ₹2,400 piece at 5%.
• Sets need care. How to treat a lehenga, choli and dupatta sold together is not clearly settled. Ask your CA before you bill an expensive set.

Wedding wear is where this matters most. A designer lehenga made from your own fabric and sold at ₹25,000 is taxed at 18%. The same lehenga stitched from the customer's own fabric, with a stitching charge of ₹8,000, is taxed at 5% on the ₹8,000.

When you must register

You must register for GST when your aggregate turnover for the financial year crosses:

A few points that catch shops out:

• The ₹40 lakh limit is not for you if you stitch. ₹40 lakh applies only to businesses that sell goods and nothing else. A shop that does any stitching is supplying a service, so the ₹20 lakh limit applies to its whole turnover.
• Turnover means everything you bill, stitching and garment sales together, across all your shops under the same PAN, before GST.
• Shipping garments to another state needs registration from the first rupee. If you take orders on Instagram or WhatsApp and courier finished garments to customers outside your state, you need to register even if your turnover is far below ₹20 lakh. Stitching for an out-of-state customer is treated differently, so ask your CA if that is most of your work.

Below the limit, you can still register voluntarily. Shops do this when their bigger customers, such as schools, hotels or companies ordering uniforms, want GST bills so they can claim the tax back.

If you are not registered, do not charge GST

An unregistered shop cannot charge GST or print "GST" on its bill. Give a plain bill or cash memo with the amount. If you add 5% "GST" to the bill and you are not registered, you are collecting tax you have no right to collect.

Should you choose the composition scheme?

Composition lets small businesses pay a flat rate on turnover and file less. For a tailoring shop it is usually a poor fit.

• For a shop that mostly stitches, the scheme open to you is the one for service providers, at 6% of turnover, with a limit of ₹50 lakh. That is more than the 5% you pay as a regular taxpayer.
• For a shop that mostly sells garments, the goods scheme at 1% of turnover, with a limit of ₹1.5 crore, can make sense. You can do some stitching alongside, up to 10% of turnover or ₹5 lakh, whichever is more.

On either scheme, you:

• cannot charge GST to customers, and issue a bill of supply instead of a tax invoice
• cannot claim back GST you paid on fabric, machines or rent
• must write "Composition taxable person" on your signboard
• cannot sell goods to customers in another state

Talk to your CA before choosing. For most stitching shops, regular registration at 5% works out cheaper and simpler.

GST on advances

Indian tailoring runs on advances, and GST treats advances for stitching and for garments differently.

• Advance for stitching: GST is due on the advance in the month you receive it, not when you deliver. Give the customer a receipt voucher for the advance, and show the GST on it.
• Advance for a garment you will sell: no GST is due on the advance. GST is due when you bill the garment. This relief does not apply if you are on composition.

If you are registered, every stitching advance you take in October belongs in October's return.

Karigars and job work

If your karigars are your employees on salary, there is no GST on their pay.

If you give work to an outside karigar or a workshop that charges you per piece:

• If they are not registered, they charge no GST and you pay none on their work.
• If they are registered, they charge you 5% on the stitching, and if you are registered you can claim that 5% back against the GST you collect.

Tax invoice, bill of supply or cash memo

Which bill you give depends on how you are registered:

• Regular registration: a tax invoice, with your GSTIN and the GST shown as CGST and SGST, or IGST for another state.
• Composition: a bill of supply, with no GST shown, and the words "composition taxable person, not eligible to collect tax on supplies".
• Not registered: a plain bill or cash memo, with no GST and without the words "tax invoice".

What a GST bill must show

Once you are registered, a tax invoice must carry:

• your shop's name, address and GSTIN
• a serial number, unique for the financial year, and the date
• the customer's name, and their GSTIN if they are registered
• a description of each item, the quantity, and the HSN or SAC code
• the value, any discount, and the taxable value
• the GST rate and amount, split into CGST and SGST (or IGST for another state)

For a customer who is not registered, you need their name, address and state only when the bill is ₹50,000 or more. For very small sales, under ₹200, to customers who are not registered and do not ask for an invoice, you can make one consolidated invoice for the day.

Stitching services fall under SAC heading 9988, and most tailors use the code 998821. If your turnover is ₹5 crore or less, you must show at least 4 digits of the HSN or SAC on bills to registered businesses. Bills to individual customers do not need it, though many shops print it anyway. E-invoicing is only for businesses above ₹5 crore, so it will not apply to most shops.

Returns you will file

Two changes from 2025 matter for small shops. A return can no longer be filed more than three years after its due date, so old unfiled returns cannot be cleaned up later. The tax worked out from your GSTR-1 now carries into GSTR-3B and cannot be edited there, so mistakes in GSTR-1 have to be corrected through GSTR-1A. The annual return, GSTR-9, is optional for turnover up to ₹2 crore.

Price with GST included, or added?

Decide this once and tell customers clearly.

• GST added: stitching ₹1,000 plus 5% GST of ₹50, total ₹1,050.
• GST included: customer pays ₹1,000, which is ₹952.38 for the stitching plus ₹47.62 GST.

Most shops that sell to walk-in customers quote prices including GST, because customers compare round numbers. Shops that work with businesses often quote GST extra. Either way, write it on your rate card. Our guide to setting stitching charges covers how to build one.

Common mistakes

• Charging 18% on stitching. It is 5%.
• Using the old ₹1,000 and 12% garment slabs after September 2025.
• Checking the ₹2,500 limit on the whole bill instead of each piece.
• Adding "GST" to bills while not registered.
• Assuming the ₹40 lakh limit applies to a shop that also stitches.
• Couriering garments to other states without registration.
• Forgetting GST on stitching advances.
• Choosing composition at 6% when regular registration at 5% costs less.

How Tailoring App handles GST

In Tailoring App you record your shop's GST details once: whether you are unregistered, on composition or registered, your GSTIN, and whether your prices include GST. Each garment and extra can carry its HSN or SAC code and GST rate, with ready settings for stitching (9988 at 5%), ready garments (5% or 18% by the ₹2,500 limit) and fabric. Customers who are businesses can have their GSTIN and billing name saved, and the app checks each GSTIN for the right format and state.

From the order's bill you can then:

• issue a GST tax invoice or, on composition, a bill of supply, numbered in order for each financial year, such as INV/26-27/0001
• give a receipt for each advance, showing the GST on it when you are registered
• print on A4, A5 or an 80 mm or 58 mm thermal printer, or share the PDF on WhatsApp
• see GST collected by rate in the reports, and download a file for your CA

Bills and invoices are in beta, and you switch them on for your shop when you are ready.