HSN Chapter 55: Man-Made Staple Fibres & Yarn GST Rates 2026
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🚀 Use Complete HSN Rate Finder🎉 GAME-CHANGING GST Relief for Staple Fibre Industry SEPTEMBER 22, 2025
Revolutionary Uniform 5% GST Across Entire Chapter 55:
In a landmark reform mirroring Chapter 54, GST 2.0 has brought ALL man-made staple fibres, yarns, and fabrics under a uniform 5% GST rate effective September 22, 2025. The textile industry's long-standing demand for ending the inverted duty structure has been fulfilled, with polyester staple fibre (PSF) and acrylic fibre rates slashed from 18% to just 5%!
Historic Tax Benefits in Chapter 55:
- 🧵 Polyester Staple Fibre (PSF): 18% → 5% ↓ 72% RATE CUT!
- 🎨 Acrylic Fibre: Reduced from 18% to 5% GST
- ✂️ Sewing Thread: 12% → 5% GST
- 🧶 Synthetic Staple Yarn: 12% → 5% ↓ 58% SAVINGS
- 📐 Woven Fabrics: Maintained at 5% (unchanged)
- 🏭 End of Inverted Duty: Complete value chain now at uniform 5%!
HSN Chapter 55 covers man-made staple fibres including synthetic (polyester, acrylic, nylon, polypropylene) and artificial (viscose, modal) staple fibres, along with sewing thread, yarns, and woven fabrics made from these staples. Unlike continuous filaments in Chapter 54, these are discontinuous fibres similar to cotton, making them suitable for spinning into yarn.
Under the transformative GST 2.0 reforms effective September 22, 2025 and continuing through 2026, the government has implemented a historic uniform 5% GST across the entire man-made staple fibre spectrum. This eliminates the notorious inverted duty structure where PSF was taxed at 18%, yarn at 12%, and fabric at 5% - a distortion that crippled domestic spinning mills for years.
⚙️ GST 2026 Rate Structure for Chapter 55
🎯 REVOLUTIONARY UNIFORM RATE: Complete Chapter 55 at 5% GST!
All products under HSN Chapter 55 now attract only 5% GST:
- 🔵 5% GST: Synthetic staple fibres - PSF, acrylic (HSN 5501-5502) - Previously 18%
- 🔵 5% GST: Artificial staple fibres - Viscose, modal (HSN 5504-5507) - Previously 18%
- 🔵 5% GST: Sewing thread (HSN 5508) - Previously 12%
- 🔵 5% GST: Synthetic/artificial staple yarn (HSN 5509-5511) - Previously 12%
- 🔵 5% GST: Woven fabrics (HSN 5512-5516) - Maintained
📊 Why This is a Textile Industry Game-Changer:
- ✅ PSF Price Relief: 13% cost reduction on polyester staple fibre
- ✅ Yarn Competitiveness: 7% savings on polyester staple yarn (PSY)
- ✅ No Inverted Duty: Input and output GST perfectly aligned at 5%
- ✅ Spinning Mill Revival: Domestic PSY now competitive with imports
- ✅ Acrylic Sector Boost: "Poor man's wool" more affordable
🧵 Synthetic Staple Fibres (HSN 5501-5503)
Polyester & Acrylic Staple Fibre - Now 5% ↓ FROM 18%
The most significant GST reform: Raw synthetic staple fibres including polyester (PSF), acrylic, and nylon have been slashed from 18% to just 5%, ending years of industry distress caused by inverted duty structure.
HSN 5501 - Synthetic Filament Tow
| HSN Code | Description | GST 2026 Rate | Previous Rate | Use |
|---|---|---|---|---|
| 5501 10 | Synthetic filament tow of nylon/polyamides | 5% | 18% | Nylon staple fibre production |
| 5501 20 | Synthetic filament tow of polyesters | 5% | 18% | PSF (Polyester Staple Fibre) raw material |
| 5501 30 | Synthetic filament tow of acrylic/modacrylic | 5% | 18% | Acrylic fibre manufacturing |
| 5501 40 | Synthetic filament tow of polypropylene | 5% | 18% | PP staple fibre production |
| 5501 90 | Other synthetic filament tow | 5% | 18% | Specialty fibres |
HSN 5502 - Artificial Filament Tow
| HSN Code | Description | GST 2026 Rate | Previous Rate | Type |
|---|---|---|---|---|
| 5502 00 | Artificial filament tow (viscose, acetate) | 5% | 18% | Rayon staple fibre production |
HSN 5503 - Synthetic Staple Fibres (Not Carded/Combed)
| HSN Code | Description | GST 2026 Rate | Previous Rate | Common Name |
|---|---|---|---|---|
| 5503 11 | Nylon/polyamide staple fibres (aramids) | 5% | 18% | Kevlar, Nomex fibres |
| 5503 19 | Other nylon/polyamide staple fibres | 5% | 18% | Nylon 6, Nylon 66 staples |
| 5503 20 | Polyester staple fibres (PSF) | 5% | 18% | PSF - Most traded fibre |
| 5503 30 | Acrylic/modacrylic staple fibres | 5% | 18% | Acrylic fibre |
| 5503 40 | Polypropylene staple fibres | 5% | 18% | PP fibre |
| 5503 90 | Other synthetic staple fibres | 5% | 18% | Specialty synthetics |
🌟 Artificial Staple Fibres (HSN 5504-5507)
HSN 5504 - Artificial Staple Fibres (Not Carded/Combed)
| HSN Code | Description | GST 2026 Rate | Previous Rate | Type |
|---|---|---|---|---|
| 5504 10 | Viscose rayon staple fibres | 5% | 18% | Viscose staple fibre (VSF) |
| 5504 90 | Other artificial staple fibres | 5% | 18% | Modal, lyocell, acetate |
HSN 5505 - Waste of Man-Made Fibres
| HSN Code | Description | GST 2026 Rate | Previous Rate | Use |
|---|---|---|---|---|
| 5505 10 | Waste of synthetic fibres (including noils, yarn waste) | 5% | 18% | Recycled fibre production |
| 5505 20 | Waste of artificial fibres | 5% | 18% | Sustainable textiles |
HSN 5506 - Synthetic Staple Fibres (Carded/Combed)
| HSN Code | Description | GST 2026 Rate | Previous Rate | Processing Stage |
|---|---|---|---|---|
| 5506 10 | Nylon/polyamide staple fibres, carded/combed | 5% | 18% | Ready for spinning |
| 5506 20 | Polyester staple fibres, carded/combed | 5% | 18% | Processed PSF |
| 5506 30 | Acrylic/modacrylic, carded/combed | 5% | 18% | Processed acrylic |
| 5506 90 | Other synthetic staples, carded/combed | 5% | 18% | Specialty processed fibres |
HSN 5507 - Artificial Staple Fibres (Carded/Combed)
| HSN Code | Description | GST 2026 Rate | Previous Rate | Type |
|---|---|---|---|---|
| 5507 00 | Artificial staple fibres, carded/combed | 5% | 18% | Processed viscose, modal |
✂️ Sewing Thread of Staple Fibres (HSN 5508)
Sewing Thread - Reduced to 5% ↓ FROM 12%
Sewing thread of man-made staple fibres has been reduced from 12% to 5% GST, benefiting garment and home textile manufacturers with 7 percentage point savings on this essential consumable.
HSN 5508 - Sewing Thread of Staple Fibres
| HSN Code | Description | GST 2026 Rate | Previous Rate | Use |
|---|---|---|---|---|
| 5508 10 | Sewing thread of synthetic staple fibres | 5% | 12% | Polyester/nylon thread |
| 5508 20 | Sewing thread of artificial staple fibres | 5% | 12% | Viscose/rayon thread |
🧶 Yarn of Synthetic Staple Fibres (HSN 5509)
Polyester Staple Yarn (PSY) - Major Relief at 5% ↓ FROM 12%
The spinning industry's biggest win: Synthetic staple yarn including polyester spun yarn (PSY), acrylic yarn, and blended yarn reduced from 12% to 5% GST, making domestic yarn competitive with imports and reviving struggling spinning mills across India.
HSN 5509 - Yarn of Synthetic Staple Fibres (Not for Retail)
| HSN Code | Description | GST 2026 Rate | Previous Rate | Yarn Type |
|---|---|---|---|---|
| 5509 11 | Yarn, ≥85% nylon/polyamide staples, single | 5% | 12% | Nylon spun yarn |
| 5509 12 | Yarn, ≥85% nylon/polyamide, multiple/cabled | 5% | 12% | Nylon plied yarn |
| 5509 21 | Yarn, ≥85% polyester staples, single | 5% | 12% | Polyester Spun Yarn (PSY) |
| 5509 22 | Yarn, ≥85% polyester, multiple/cabled | 5% | 12% | PSY plied |
| 5509 31 | Yarn, ≥85% acrylic/modacrylic, single | 5% | 12% | Acrylic yarn |
| 5509 32 | Yarn, ≥85% acrylic, multiple/cabled | 5% | 12% | Acrylic plied yarn |
| 5509 41-49 | Yarn of other synthetic staple fibres | 5% | 12% | PP, specialty yarns |
| 5509 51-59 | Yarn of polyester staples mixed with other fibres | 5% | 12% | Polyester blended yarn |
| 5509 61-69 | Yarn of acrylic staples mixed with other fibres | 5% | 12% | Acrylic blended yarn |
| 5509 91-99 | Other synthetic staple yarn (mixed) | 5% | 12% | Blended synthetic yarns |
🌟 Yarn of Artificial Staple Fibres (HSN 5510)
HSN 5510 - Yarn of Artificial Staple Fibres (Not for Retail)
| HSN Code | Description | GST 2026 Rate | Previous Rate | Yarn Type |
|---|---|---|---|---|
| 5510 11 | Yarn, ≥85% artificial staples, single | 5% | 12% | Viscose spun yarn |
| 5510 12 | Yarn, ≥85% artificial staples, multiple/cabled | 5% | 12% | Rayon plied yarn |
| 5510 20 | Yarn of artificial staples mixed with other fibres | 5% | 12% | Viscose blended yarn |
| 5510 30 | Yarn of artificial staples mixed with wool/animal hair | 5% | 12% | Rayon-wool blend |
| 5510 90 | Other artificial staple yarn | 5% | 12% | Modal, lyocell yarn |
🧶 Yarn for Retail Sale (HSN 5511)
HSN 5511 - Yarn Put Up for Retail Sale
| HSN Code | Description | GST 2026 Rate | Previous Rate | Market |
|---|---|---|---|---|
| 5511 10 | Yarn of synthetic staples, retail packing | 5% | 18% | Consumer knitting yarn |
| 5511 20 | Yarn of artificial staples, retail packing | 5% | 18% | Consumer rayon yarn |
📐 Woven Fabrics of Staple Fibres (HSN 5512-5516)
✅ Woven Fabrics Maintain 5% - Perfect Alignment Achieved!
Woven fabrics of man-made staple fibres continue at 5% GST (unchanged), but now the entire value chain from PSF to fabric is uniformly taxed at 5%, eliminating the inverted duty nightmare that plagued spinning mills.
HSN 5512 - Woven Fabrics of Synthetic Staples (≥85% Synthetic)
| HSN Code | Description | GST 2026 Rate | Previous Rate | Fabric Type |
|---|---|---|---|---|
| 5512 11 | Fabrics ≥85% polyester staples, unbleached/bleached | 5% | 5% | Base polyester fabric |
| 5512 19 | Fabrics ≥85% polyester, other finishes | 5% | 5% | Dyed/printed polyester |
| 5512 21 | Fabrics ≥85% acrylic staples, unbleached/bleached | 5% | 5% | Base acrylic fabric |
| 5512 29 | Fabrics ≥85% acrylic, other finishes | 5% | 5% | Dyed/printed acrylic |
| 5512 91 | Other synthetic fabrics, unbleached/bleached | 5% | 5% | Nylon, PP fabrics |
| 5512 99 | Other synthetic fabrics, other finishes | 5% | 5% | Specialty synthetic fabrics |
HSN 5513-5514 - Polyester/Cotton Blended Fabrics
| HSN Code | Description | GST 2026 Rate | Previous Rate | Blend Type |
|---|---|---|---|---|
| 5513 | Fabrics <85% synthetic + cotton, ≤170 g/m² (all finishes) | 5% | 5% | Lightweight PC blends |
| 5514 | Fabrics <85% synthetic + cotton, >170 g/m² (all finishes) | 5% | 5% | Heavyweight PC blends |
HSN 5515 - Other Woven Fabrics of Synthetic Staples
| HSN Code | Description | GST 2026 Rate | Previous Rate | Composition |
|---|---|---|---|---|
| 5515 11-19 | Polyester staple mixed with viscose (all finishes) | 5% | 5% | PV (Polyester-Viscose) blend |
| 5515 21-29 | Polyester staple mixed with manmade filaments | 5% | 5% | Polyester blended fabrics |
| 5515 91-99 | Other synthetic staple fabrics (mixed) | 5% | 5% | Specialty blended fabrics |
HSN 5516 - Woven Fabrics of Artificial Staples
| HSN Code | Description | GST 2026 Rate | Previous Rate | Fabric Type |
|---|---|---|---|---|
| 5516 11-14 | Fabrics ≥85% artificial staples (all finishes) | 5% | 5% | Viscose/rayon fabrics |
| 5516 21-24 | Fabrics <85% artificial + cotton, ≤170 g/m² | 5% | 5% | Rayon-cotton blend |
| 5516 31-34 | Fabrics <85% artificial + cotton, >170 g/m² | 5% | 5% | Heavy rayon blends |
| 5516 41-44 | Fabrics <85% artificial mixed with manmade filaments | 5% | 5% | Rayon specialty blends |
| 5516 91-94 | Other woven fabrics of artificial staples | 5% | 5% | Modal, lyocell fabrics |
🧮 GST 2026 Calculator for Chapter 55 Items
Staple Fibre & Yarn GST Calculator - 2026 Uniform 5% Rate
Calculate GST for all man-made staple fibre products at new reduced rate:
CGST = (Product Value × 5%) ÷ 2 = Product Value × 2.5%
SGST = (Product Value × 5%) ÷ 2 = Product Value × 2.5%
Total GST = CGST + SGST = Product Value × 5%
Final Amount = Product Value + Total GST
📋 GST 2026 Compliance Points for Chapter 55
🏭 PSF & Fibre Manufacturers
- PSF taxed at only 5% (was 18%)
- 13% cost reduction on raw material
- Export competitiveness improved
- Recycled PSF also at 5%
- Uniform taxation with yarn/fabric
🧶 Spinning Mills & Yarn Makers
- PSY (Polyester Spun Yarn) at 5% (was 12%)
- No inverted duty structure
- Domestic yarn now competitive
- Smooth ITC flow from PSF to yarn
- Acrylic yarn industry revival
📐 Fabric Weavers & Processors
- 5% GST on fabrics (unchanged)
- Perfect alignment with input yarn at 5%
- No ITC accumulation issues
- Improved working capital
- Cost-competitive production
👔 Garment & Home Textile Units
- 5% on fabric inputs (maintained)
- 5% on sewing thread (down from 12%)
- Lower raw material costs
- Better export margins
- Make in India competitive
🎯 GST 2026 Sector Impact Analysis
Transformative Benefits for Staple Fibre Industry
- 💰 PSF Cost Drop: 13% reduction (18% → 5%) saves ₹13 per ₹100 of PSF
- 🧶 PSY Savings: 7% reduction (12% → 5%) boosts spinning mill profitability
- 🎨 Acrylic Revival: "Poor man's wool" more affordable for sweater industry
- 📊 Import Substitution: Domestic yarn now competitive vs. Chinese/Indonesian imports
- 🏭 Spinning Mill Revival: End of inverted duty ensures survival of domestic mills
- 💼 Employment: Thousands of spinning jobs saved from closure
Strategic Industry Advantages
- 🌍 Global Competitiveness: Indian PSY/PSF prices match international markets
- 📈 Capacity Utilization: Mills running at full capacity instead of shutdowns
- ♻️ Sustainability: Recycled PSF equally taxed at 5%, promoting circular economy
- 🎯 Value Chain Integration: Encourages vertical integration from fibre to fabric
- 🔗 Supply Chain Efficiency: Uniform rates simplify logistics and pricing
❓ Frequently Asked Questions (FAQs) - HSN Chapter 55
Answer: Yes! This is the biggest GST reform for the textile sector. Effective September 22, 2025, Polyester Staple Fibre (PSF) under HSN Code 5503 20 has been drastically reduced from 18% to 5% GST.
This 13 percentage point reduction ends the notorious inverted duty structure where PSF was taxed at 18%, yarn (PSY) at 12%, and fabric at 5%. Now the entire value chain is uniformly at 5%!
Answer: Polyester Spun Yarn (PSY) classified under HSN 5509 21 is now taxed at 5% GST (reduced from 12%).
This 7-point reduction makes Indian spinning mills competitive again, as they were previously crushed by the inverted duty structure where they paid 18% GST on PSF input but collected only 12% on PSY output.
Answer: Yes! Under GST 2.0 effective September 22, 2025, ALL products under HSN Chapter 55 attract uniform 5% GST:
- Synthetic/artificial staple fibres - 5% (was 18%)
- Sewing thread - 5% (was 12%)
- Synthetic/artificial staple yarn - 5% (was 12%)
- Woven fabrics - 5% (unchanged)
This uniform structure eliminates the inverted duty problem that plagued the industry for years.
Answer: The uniform 5% rate solves the critical inverted duty structure problem:
- OLD Problem: Mills paid 18% GST on PSF input, but collected only 12% on PSY output
- Result: Excess ITC accumulated, blocking ₹1000s of crores in working capital
- NEW Solution: Both PSF and PSY at 5% - No ITC accumulation
- Benefit: Improved cash flow, competitive pricing, revival of shuttered units
Answer: Both acrylic fibre and acrylic yarn now attract 5% GST:
- Acrylic Staple Fibre (HSN 5503 30): 5% (was 18%)
- Acrylic Yarn (HSN 5509 31): 5% (was 12%)
This benefits the sweater/knitwear industry as acrylic (poor man's wool) becomes significantly more affordable.
Answer: Yes! Registered spinning mills and yarn manufacturers can claim full Input Tax Credit on 5% GST paid on PSF purchases when:
- ✅ PSF is used for manufacturing taxable yarn/fabric
- ✅ Proper GST invoices are maintained
- ✅ Business is registered and compliant
The best part: With uniform 5% rates on PSF, yarn, and fabric, ITC flows smoothly without accumulation.
Answer: Viscose/rayon staple fibre (VSF) under HSN 5504 10 and all artificial staple products attract 5% GST (reduced from 18%).
This includes:
- Viscose Staple Fibre (VSF)
- Modal fibre
- Lyocell fibre
- Viscose spun yarn
Answer: Savings are substantial across the value chain:
- On PSF Purchase: 13% reduction = ₹13 saved per ₹100 of PSF
- On Yarn Output: 7% better realization (from 12% to 5%) improves margins
- Cash Flow: No ITC accumulation = Better working capital by lakhs of rupees
- Example: A mill buying ₹10 crore PSF annually saves ₹1.3 crore in GST costs!
Answer: Yes! Recycled polyester staple fibre (rPET/rPSF) is classified under HSN 5503 20 and attracts the same 5% GST as virgin PSF.
This promotes sustainability and circular economy in textiles by making recycled materials equally affordable.
Answer: The revolutionary uniform 5% GST rate for man-made staple fibres became effective from September 22, 2025 under the GST 2.0 reforms.
All transactions from this date onwards attract the new reduced rates, continuing through 2026 and beyond. This is part of the government's strategy to boost the Make in India textile sector.
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