Worn Clothing - GST Rates HSN Code 6309

Worn clothing is a common item for businesses dealing in second-hand clothing or vintage clothing. However, when it comes to GST rates and HSN code, it can be confusing to understand the applicable rates and codes. In this article, we will provide a detailed explanation of GST rates and HSN code for worn clothing.

GST Rates for Worn Clothing

Under GST, worn clothing is classified under the category of used or second-hand goods. The GST rates for used or second-hand goods are 18% on the value of supply. However, this rate is subject to a margin scheme.

The margin scheme is applicable to the following transactions:

1. Supply of second-hand goods by a registered person to an unregistered person.

2. Supply of used, old or second-hand motor vehicles.

3. Supply of goods received from an unregistered person.

Under the margin scheme, the tax is payable only on the margin of the value of supply, which is the difference between the selling price and the purchase price of the goods. The margin scheme is applied for determining the GST rate for worn clothing.

For example, if a business sells a used shirt for Rs. 500, and the purchase price of the shirt was Rs. 300, then the margin will be Rs. 200 (Rs. 500 – Rs. 300). The GST rate will be calculated on the margin, which is 18% of Rs. 200, which is Rs. 36. Therefore, the total price of the used shirt will be Rs. 536 (Rs. 500 + Rs. 36).

HSN Code for Worn Clothing

The HSN code for worn clothing is 6309. This code is used for clothing and accessories, including worn clothing. The 6309 HSN code is further divided into the following sub-headings:

1. 6309.00 – Worn clothing and other worn articles.

2. 6309.00.10 – Worn clothing.

3. 6309.00.90 – Other worn articles.

When filing GST returns, it is important to correctly enter the HSN code for worn clothing to ensure accurate classification of goods and payment of the correct tax amount.

Conclusion

Worn clothing is subject to a margin scheme under GST, with a rate of 18% on the value of supply. Businesses dealing in worn clothing should ensure that they correctly enter the HSN code for worn clothing when filing GST returns to avoid any penalties or incorrect classification of goods.