HSN code and GST rate for clothing labels, patches and hang tags

The question arrives with almost every first order: "What HSN do I put on the PO, and is it 5 or 12?" It matters more than it looks. A purchase order with the wrong code gets queried by the supplier's accounts desk; an invoice with the wrong rate gets rejected by yours; and a quote comparison where one supplier shows 5 percent and another shows a rate from last year's table is not a comparison at all. Our guide to reading a label quotation says to check the GST line first; this article is the reference for what that line should say.

Everything below is taken from Notification 9/2025-Integrated Tax (Rate) dated 17 September 2025, which replaced the 2017 rate schedules from 22 September 2025, and from the matching Central and State tax notifications. We are a label manufacturer, not a tax adviser, so treat this as a working reference for a purchase order and confirm anything that affects a return with your accountant.

list_altThe codes and rates, product by product

The dividing line is the material. Anything that is a textile label or badge, woven or printed on a woven base, is chapter 58 and 5 percent. Anything paper is chapter 48 and 18 percent. Anything plastic is chapter 39 and 18 percent. A heat transfer is a printed film, so it follows the paper and plastic side even though it ends up on a garment. That is the single most common surprise on a mixed order: the labels at 5 percent and the hang tags, tag pins and transfers on the same invoice at 18 percent.

Paper-based "jacron" patches used on denim are a chapter 48 product (4823, Schedule II, 18 percent), and genuine leather patches are other articles of leather under 4205 (Schedule II, entry 147, 18 percent). Both look like a label and neither is taxed like one, so ask the supplier for the code before raising the order.

historyWhat changed on 22 September 2025

The 56th GST Council meeting collapsed the old 5, 12, 18 and 28 percent structure into two main slabs, 5 and 18 percent, with 40 percent for a short list of goods. The notifications took effect on 22 September 2025. For the trims a clothing brand buys:

• Labels and badges (5807) went from 12 to 5 percent. So did narrow woven fabrics (5806), embroidery and embroidered badges (5810), braids and trims (5808), knitted fabrics (chapter 60) and most other textile goods, as part of the fix for the inverted duty structure in man-made textiles.
• Heat transfers (4908) went from 12 to 18 percent. The 12 percent slab was abolished and transfers were placed in the 18 percent schedule with the rest of chapter 49.
• Paper labels and hang tags (4821) stayed at 18 percent, as did plastic articles (3926) and buttons (9606).
• Garments are now 5 percent up to a sale value of Rs 2,500 per piece and 18 percent above it (entries 388 and 389 of Schedule I, 197 and 198 of Schedule II). The old Rs 1,000 threshold is gone.

Two practical consequences. A label quotation or price list dated before September 2025 that says "plus 12 percent GST" is out of date and the supplier should reissue it; the price itself has not changed, only the tax. And most HSN lookup sites, including some of the best known, still showed 12 percent for 5807 a year after the change, so do not settle a dispute with a screenshot of one; use the notification.

receipt_longWhat the supplier's invoice must show

The HSN on the tax invoice is a legal requirement, and the number of digits depends on the supplier's aggregate turnover under Notification 78/2020-Central Tax, in force since 1 April 2021:

• E-invoicing. A supplier whose aggregate turnover crossed Rs 5 crore in any year since 2017-18 must issue B2B invoices through the e-invoice portal, and the invoice carries an IRN and a QR code. If your label supplier is above the threshold and the invoice has no IRN, the credit is at risk.
• Tax split. A supplier and buyer in the same state pay CGST and SGST (2.5 + 2.5 percent on labels); across states it is IGST (5 percent). A label maker in Gujarat invoicing a brand in Maharashtra charges 5 percent IGST.
• Bill-to, ship-to. Labels are often invoiced to the brand and delivered to the garment factory in another state. The place of supply follows the bill-to party, so the tax split follows the brand's state, not the factory's. Give the supplier both addresses and both GSTINs where relevant.
• What else is on the line. Setup charges, sampling and freight charged by the supplier are part of the taxable value of the labels and carry the same 5 percent, not a separate rate. Our guide to reading a label quotation covers those lines.

A sample of a label invoice that reads correctly:

account_balance_walletInput tax credit on labels

For a garment maker or a brand that sells taxable garments, labels, tags, patches and transfers are inputs, and the GST paid on them is available as input tax credit against the GST charged on the garments. Three conditions apply: you hold a valid tax invoice, the supplier has filed it so it appears in your GSTR-2B, and you have received the goods.

• Labels at 5 percent against garments at 5 percent: the credit is used in the same return. Nothing accumulates.
• Hang tags and transfers at 18 percent against garments at 5 percent: the credit exceeds the output on that part of the cost, and it accumulates. The refund of credit accumulated under an inverted duty structure has its own rules and exclusions, and your accountant decides whether to claim it or carry it.
• Garments above Rs 2,500 at 18 percent: all input credit is absorbed.
• Unregistered buyers: a small boutique below the registration threshold pays the GST as a cost and cannot claim it. For those buyers the 5 percent on labels is simply part of the price.

The practical rule: ask for the tax invoice at the time of payment, check it against GSTR-2B the following month, and raise any mismatch with the supplier before the return is filed. A label order is small, but a dozen small mismatches a year is a day of reconciliation.

publicExport orders and job work

• Labels exported from India, to a brand abroad or to a factory in another country, are a zero-rated supply. The supplier ships under a Letter of Undertaking without charging GST, or charges IGST and claims the refund. The shipping bill carries the 8-digit code, 5807 10 20 for polyester labels. Our international ordering page covers the documents.
• Labels for an export garment order delivered within India are a domestic supply. GST at 5 percent applies on the labels; the garment exporter takes the credit and recovers it on export. Supplies to an SEZ unit are zero-rated on the same basis as exports, with the SEZ endorsement.
• Job work. If you supply the satin or the yarn and the label maker only weaves or prints, the service is job work on textile goods of chapters 50 to 63, taxed at 5 percent on the job charge under SAC 9988, with credit. The material moves on a delivery challan without GST. Most label orders are not job work: the label maker uses its own yarn and satin, so the invoice is a sale of goods under 5807 at the same 5 percent.
• Imported labels attract basic customs duty and IGST at 5 percent on entry under 5807; a 2026 advance ruling confirmed that man-made fibre label rolls are 5807 10 20 rather than narrow fabrics. Few Indian brands import labels, because the duty and freight erase the price difference, but the code matters for anyone bringing in a parent brand's labels.

edit_noteWriting the purchase order

A purchase order that avoids every query we see on the accounts desk has these lines for each item:

• Description with material, size and fold, in the supplier's words.
• HSN at 6 digits: 5807 10 for woven and printed labels, 5810 92 for embroidered patches, 4821 10 for paper tags, 4908 90 for transfers.
• Quantity and rate on the same basis as the quote, per piece or per 1,000.
• GST rate against each line: 5 percent on the chapter 58 lines, 18 percent on the paper and plastic lines.
• Bill-to GSTIN and ship-to address, if they differ.
• Whether the order is for export under LUT, with the buyer's details abroad.

Where a quote lists a mixed order as one total "plus GST", ask for it line by line before accepting, because the hang tags and tag pins at 18 percent move the total more than the labels at 5 percent. Our label cost guide and bulk ordering guide show how the pre-tax price is built.

storefrontGST on Labelwala orders

We make woven, printed, satin, cotton and care labels, patches and hang tags in Ahmedabad, Gujarat, and we have been doing it for 25 years. We are GST-registered and every order is invoiced with the HSN and the tax split printed on it.

• Labels, size tabs, name tapes, woven patches: HSN 5807, GST 5 percent.
• Embroidered patches: HSN 5810, GST 5 percent.
• Printed ribbons: HSN 5806, GST 5 percent.
• Paper hang tags: HSN 4821, GST 18 percent.
• Export orders: shipped under LUT without GST, with the 8-digit code on the shipping bill.
• Minimum order: 1,000 pieces per design. Quotes usually within 2 hours on a working day; production 7-10 days after artwork approval.

Our quotes and the price calculator show the manufacturing price before GST, with the 5 percent added on the invoice, so you can compare them with any other quote on the same basis. Tell us your GSTIN and whether the labels are for export when you confirm the order and the invoice will be right the first time.

We are rated 5.0 on Google from 27 reviews. If your accounts team needs the invoice in a particular format, or an e-invoice with IRN, say so with the order.

warningCommon mistakes

• Raising a PO with "12 percent" from a rate table that predates 22 September 2025.
• Putting heat transfers under 5807 at 5 percent; they are 4908 at 18 percent.
• Expecting paper hang tags at the label rate.
• A 4-digit HSN on the invoice from a supplier above Rs 5 crore turnover, when 6 digits are required.
• No IRN on a B2B invoice from a supplier who is over the e-invoice threshold.
• Charging CGST and SGST on an interstate supply because the labels were delivered to a factory in the supplier's state while the bill-to was elsewhere.
• Treating labels for an export garment order, delivered in India, as zero-rated.
• Setup and freight on the invoice at a different rate from the labels.
• Paying without a tax invoice and finding nothing in GSTR-2B.
• Comparing a GST-inclusive quote with a GST-exclusive one.

checklistChecklist before you accept a label invoice

• HSN present, and at the right number of digits for the supplier's turnover?
• 5807 for labels, 5810 for embroidered patches, 4821 for paper tags, 4908 for transfers, 3926 for plastic items?
• 5 percent on the chapter 58 lines, 18 percent on the chapter 39, 48 and 49 lines?
• CGST + SGST for a same-state bill-to, IGST for a different state?
• Setup, sampling and freight taxed at the same rate as the goods?
• Supplier's GSTIN, your GSTIN and the invoice date and number present?
• IRN and QR code if the supplier is over the e-invoice threshold?
• Export order shipped under LUT with no GST, or IGST charged with a refund claim?
• Invoice appears in your GSTR-2B the following month?
• Quote and invoice on the same GST basis, inclusive or exclusive?

checkWhat we would recommend

Put HSN 5807 10 at 5 percent on every purchase order for woven, printed, satin, taffeta and cotton labels, care labels, size tabs and name tapes; 5810 at 5 percent for embroidered patches; 4821 at 18 percent for paper hang tags; and 4908 at 18 percent for heat transfers. Ask for the invoice line by line on a mixed order, check the tax split against the bill-to state, and match it to GSTR-2B before you file.

If a supplier's quote still says 12 percent, the quote is older than September 2025; ask for a current one. The labels cost the same, and the tax on them is now 5.