HSN Codes and GST Rates — eCommerce Seller Reference
- From 22 September 2025, the 12% and 28% slabs are abolished — the structure is 0 / 5 / 18 / 40.
- Apparel and footwear up to ₹2,500 attract 5%; above that, 18%.
- The threshold is per article (per pair for footwear) and uses the sale value, not the MRP.
- Table 12 needs 4 HSN digits up to ₹5 crore turnover, 6 digits above.
- For periods before 22 Sept 2025, the old rates still apply — the change was not retrospective.
On this page
Two things changed for every online seller on 22 September 2025: the 12% and 28% slabs were abolished, and the price threshold for cheap apparel and footwear moved from ₹1,000 to ₹2,500. If your product catalogue still carries rates from before that date, some of your GSTR-1 filings are wrong.
This page is the reference: what the slabs are now, how the ₹2,500 threshold actually works, how to pick an HSN code you can defend, and what happens if you get it wrong.
The GST 2.0 slabs
Notification 09/2025-Central Tax (Rate), dated 17 September 2025 and effective 22 September 2025, rationalised the rate structure to two main slabs plus a demerit rate.
| Rate | Applies to | Status |
|---|---|---|
| 0% | Essential food, unbranded staples, books | Unchanged |
| 5% | Mass-market goods, and apparel/footwear up to ₹2,500 | Widened — absorbed much of the old 12% |
| 18% | Standard rate for most goods and services | Widened — absorbed much of the old 28% |
| 40% | Demerit and luxury goods | New demerit rate |
| 12% | Abolished from 22 Sept 2025 | |
| 28% | Abolished from 22 Sept 2025 | |
The ₹2,500 threshold — where sellers get it wrong
Apparel and footwear priced up to ₹2,500 attract 5%. Above ₹2,500, the rate is 18%. Three things trip people up:
It is per piece, not per order
Three shirts at ₹900 each in one order is three items of ₹900, all at 5% — not a ₹2,700 order at 18%. The threshold applies to the sale value of the individual article. For footwear it is per pair.
₹2,500 exactly is in the lower slab
The wording is "up to ₹2,500", so an item priced at exactly ₹2,500 attracts 5%. It is ₹2,500.01 and above that moves to 18%.
Which price decides it
It is the sale value of the article — the transaction value on which GST is charged — not the MRP printed on the tag and not the price before a marketplace discount. A shirt with an MRP of ₹3,000 that actually sells for ₹1,800 is a ₹1,800 supply, at 5%. This matters enormously on Meesho and Myntra, where heavy discounting is normal.
How HSN codes work
HSN (Harmonised System of Nomenclature) is an international product classification. The code gets more specific as it gets longer:
| Digits | Meaning | Example |
|---|---|---|
| 2 | Chapter — broad category | 62 — articles of apparel, not knitted |
| 4 | Heading | 6205 — men's shirts |
| 6 | Sub-heading | 620520 — men's shirts of cotton |
| 8 | Tariff item — full specificity | 62052000 |
How many digits you must report
| Aggregate turnover | HSN digits required in GSTR-1 Table 12 |
|---|---|
| Up to ₹5 crore | 4 digits (B2B mandatory; B2C optional but recommended) |
| Above ₹5 crore | 6 digits |
Table 12 is now a dropdown-and-validation field on the portal rather than free text, so an HSN that does not exist will be rejected outright rather than filed and questioned later.
Common eCommerce categories
Use this as a starting point, then confirm against your actual product. The chapter is reliable; the exact 6- or 8-digit code depends on material and construction.
| Product | Chapter / typical heading | Rate from 22 Sep 2025 |
|---|---|---|
| Knitted apparel (t-shirts, sweatshirts) | 61 | 5% up to ₹2,500 · 18% above |
| Woven apparel (shirts, trousers, sarees) | 62 | 5% up to ₹2,500 · 18% above |
| Footwear | 64 | 5% up to ₹2,500/pair · 18% above |
| Bags, wallets, luggage | 42 | 18% |
| Imitation jewellery | 7117 | Confirm — verify before filing |
| Cosmetics and skincare | 33 | 18% |
| Mobile phones | 8517 | 18% |
| Mobile accessories (cases, cables) | 8517 / 3926 | 18% |
| Home furnishing (bedsheets, curtains) | 63 | Depends on value — verify |
| Toys | 9503 | Verify — varies by type |
Choosing a code you can defend
- Start from what the item is made of and how it is made. Knitted goes in chapter 61, woven in 62. That single distinction resolves most apparel questions.
- Use the marketplace's own classification as a hint, not an answer. Platform category trees are built for browsing, not for customs classification.
- Be consistent. The same product should carry the same HSN in every return — and on every marketplace you sell it on. Inconsistency across periods is itself a flag.
- Write down your reasoning once. If you are ever asked why you classified a product a particular way, a one-line note from the time you decided is worth far more than a reconstruction two years later.
What actually happens if the HSN is wrong
The consequence depends on whether the rate was also wrong:
- Wrong HSN, correct rate — a reporting defect. Usually correctable by amendment; the tax was right.
- Wrong HSN, rate too low — you have short-paid. Expect demand for the differential plus 18% per annum interest, and potentially a penalty. See the notice decoder for what that looks like in practice.
- Wrong HSN, rate too high — you overpaid. Refunds are possible but the process is slow, and your buyer may have claimed credit they were not entitled to.
The asymmetry matters: under-charging is far more expensive than over-charging, but over-charging quietly loses you money and creates a problem for your B2B buyers. Neither is a safe default — the answer is to classify correctly.
Stop mapping HSN codes by hand every month
GSTWali remembers the HSN and rate for each of your products and applies them across every marketplace report — so Table 12 builds itself and stays consistent period to period.
Try it free →Frequently asked questions
What is the GST rate on clothes in 2026?
Since 22 September 2025, apparel with a sale value up to Rs 2,500 attracts 5% GST, and apparel above Rs 2,500 attracts 18%. The threshold was raised from Rs 1,000 under Notification 09/2025-Central Tax (Rate).
Is the Rs 2,500 threshold per item or per order?
Per item. Three shirts at Rs 900 each in one order are three separate Rs 900 supplies, all at 5% - not a Rs 2,700 order at 18%. For footwear the threshold is per pair.
Does the Rs 2,500 threshold use MRP or selling price?
The sale value, meaning the transaction value on which GST is charged. A shirt with an MRP of Rs 3,000 that actually sells for Rs 1,800 is an Rs 1,800 supply and attracts 5%.
Do the 12% and 28% GST slabs still exist?
Not for supplies made on or after 22 September 2025 - they were abolished and their items redistributed to 5% and 18%. However, if you are filing or amending a return for a period before that date, you must use the rates in force at the time, which included 12% and 28%.
How many HSN digits do I need in GSTR-1?
Four digits if your aggregate turnover is up to Rs 5 crore, and six digits if it is above Rs 5 crore. Table 12 now validates the code against a dropdown, so an invalid HSN is rejected at upload rather than questioned later.
What happens if I use the wrong HSN code?
If the rate you charged was still correct, it is a reporting defect that can usually be fixed by amendment. If the wrong HSN led you to charge too little tax, you face a demand for the shortfall plus 18% per annum interest and possibly a penalty. Charging too much means a slow refund process and a credit problem for your buyer.