GST on Embroidery Work in India: Rates & HSN Codes Explained

If you run an embroidery unit in India — whether you do hand embroidery, machine embroidery, or computer-controlled embroidery — understanding the correct GST rates and HSN codes for your work is essential. Getting this wrong can lead to charging the wrong tax rate to clients, claiming the wrong ITC, and receiving notices from the GST department. Yet many embroidery business owners in India are unclear about exactly which rate applies to their specific type of work.

In this guide, we explain GST on embroidery work in India clearly and in simple words. We cover the correct HSN codes for different types of embroidery, the applicable GST rates, the difference between job work and direct sale, and the compliance steps you need to follow. By the end, you will know exactly how to invoice your embroidery work and stay fully compliant with GST law in 2026.

HSN Codes for Embroidery in India

HSN (Harmonised System of Nomenclature) codes classify goods under GST. For embroidery, the most important HSN codes fall under Chapter 58 of the GST tariff schedule, which covers special woven fabrics, tufted textile fabrics, lace, tapestries, trimmings, and embroidery.

*Note: For readymade garments and made-up articles, GST is 5% if the retail sale price is ₹1,000 or less, and 12% if the retail sale price exceeds ₹1,000.

The Most Important GST Distinction for Embroidery Units

The single most important GST distinction every embroidery business owner must understand is this: are you doing job work or are you selling embroidered goods? This distinction determines which HSN code and GST rate apply to your invoice.

Job Work (HSN 9988) — 5% GST

Job work means you are performing embroidery work on fabric or garments that belong to your customer (called the “principal”). The principal sends you grey fabric or cut pieces. You do the embroidery and return the embroidered fabric or pieces back to them. In this case, the fabric never becomes your property — you are providing a service on someone else’s goods. This is job work under Section 2(68) of the CGST Act, and it attracts GST at 5% under HSN code 9988 for textile job work. This is the most common arrangement for embroidery units working with garment manufacturers, textile exporters, and readymade garment factories.

Sale of Embroidered Goods (HSN 5810) — 12% GST

If you buy plain fabric yourself, do the embroidery on it, and then sell the finished embroidered fabric or product to a customer, this is a sale of goods — not job work. In this case, you are selling embroidered fabric or products, which falls under HSN 5810 at 12% GST. This applies to embroidery units that procure their own raw materials and sell finished embroidered fabric, lace, motifs, or patches in the open market.

Real Example: Priya’s Embroidery Unit in Surat

Priya runs a machine embroidery unit in Surat. She has two types of customers. First, garment factories send her cut fabric pieces and ask her to do embroidery as per their design. She returns the embroidered pieces to them. For this work, she charges a job work fee and invoices under HSN 9988 at 5% GST. Second, she also makes embroidered dupatta borders and saree falls from her own purchased fabric, which she sells in the wholesale market. For this, she invoices under HSN 5810 at 12% GST.

Understanding this distinction clearly saves Priya significant money and keeps her audit-ready. Her job work clients (garment factories) also benefit because they can claim ITC on the 5% GST she charges them, which reduces their overall tax cost. Also, charging the wrong rate — for example, applying 12% on job work — would mean her clients pay extra tax unnecessarily and may choose a competitor who charges correctly.

GST Registration Requirement for Embroidery Units

GST registration is mandatory for embroidery units with an annual aggregate turnover exceeding ₹20 lakh (for service/job work providers) or ₹40 lakh (for goods sellers). Also, if you provide embroidery job work services across state borders — for example, if you are in Gujarat and your client is in Maharashtra — inter-state supply rules apply and GST registration is mandatory regardless of turnover. Furthermore, if you supply job work services to exporters (zero-rated supply), GST registration is mandatory to claim refunds.

Even if your turnover is below the threshold, voluntary GST registration is strongly recommended for embroidery units doing job work for GST-registered garment factories. Most large garment manufacturers prefer to work with GST-registered job workers because they can claim ITC on the job work charges they pay you. Without GST registration, you lose these larger clients.

ITC (Input Tax Credit) for Embroidery Businesses

As a GST-registered embroidery unit, you can claim ITC on all your business purchases. This includes: GST paid on embroidery threads and yarns, GST paid on embroidery machine maintenance and spare parts, GST paid on embroidery designs or software, and GST paid on business-related electricity and internet services. This ITC offsets your output tax liability, reducing how much you pay to the government. Also, if you are doing mostly export job work (zero-rated supply with refund), you can claim a refund of the accumulated ITC.

Monthly GST Compliance for Embroidery Units

Once GST registered, you must file GSTR-1 by the 11th of each month (reporting all your outward supplies — invoices issued to clients), and GSTR-3B by the 20th of each month (reporting your net GST liability and paying any tax due). Also, verify your GSTR-2B before filing GSTR-3B to ensure you are claiming only eligible ITC. If you are under the QRMP scheme (Quarterly Return Monthly Payment), your filing frequency is reduced but you still pay GST monthly.